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supply-side policies
designed to increase LRAS
what are supply-side policies good for?
long-run growth
structural and frictional unemployment, increasing labour force participation
helps reduce inflation in the long run
improves international competitiveness
interventionist policies
designed to increase LRAS by moving markets away from equilibrium through government intervention
e.g. increase minimum wage, spending on healthcare and education, spending on infrastructure, subsidising R+D
free market policies
designed to increase LRAS by allowing free markets to operate more freely
e.g. deregulation, decrease minimum wage, privatisation, lower welfare payments, decrease income/corporation tax
