Supply Side Policies

Supply side policies

set of economic measures + strategies that aim to improve the long run productive capacity and efficiency of an economy

Aims of supply side policy

improves incentives, increases labour + capital productivity, promotes mobility of labour, increases capital investment and research and development

Free market approach

these policies emphasise minimal gov intervention and regulation while promoting entrepeneurship and competition

Types of free market approaches

tax cuts. Deregulation. labour market flexibility. privatisation and trade liberalisation.

Supply side policies to improve competition

competition policy. Deregulation. Market access

Supply side policies to reform labour markets

labour market deregulation. Reducing trade union power. Immigration reforms. Gender and diversity inclusion

Criticisms of free market supply side policies

income inequality, reduced social safety nets, underinvestment in public goods, market failure and financial instability

Interventionist supply side policies

state investment in key public services. commitment to minimum wage

Criticisms of interventionist supply side policies

inefficiency. Crowding out private sector. Reduced incentives. Ineffective redistribution. Costly and inefficient state enterprises.

Crowding out private sector

interventions may crowd out private investment and entrepeneurship

Reduced incentives

critics claim that high taxation and extensive regulation can reduce incentives to work and invest

Ineffective redistribution

high tax levels may lead to capital flight and tax evasion