supply side policies

what is it

government policy to increase productivity and shift AS to the right

what are 7 SSP + how they work

1. privitisation. more efficient to run as have a profit motive

2. deregulation. reducing barriers to entry. BT used to be monopoly

3. reducing power of trade unions. increase efficiency for firms and reduction in unemployment

4. reducing income taxes higher incentives to work

5. increased education and training. labour productivity, often under provoded causing market failure.

6. reducing benefits. unemployment trap

7. better information about jobs reduce frictional unemployment

applications.

1. post 2008 uk potential growth has plummited 1 and a half % from 2008 to covid. very poor productivity. poor business investment and underperforming public services

2. economic inactivity has increased since covid. thoes of working age, not willing or able to work or seeking employment. over 1 million workers mental health and stress related issues

3. average weekly earnings. regional growth. in london and the south- £700. north £500. shift from industrial growth to service based growth

4. CA deficit, productivity 25% less pre finantial crash, productivity 0.4% growth since. dystroyed competitivness. low innovation and job oppertunities

supply side policies to correct applications

1. reduction in growth

2. increase in economic inactive

3. natural rate of unempoloyment

4. regional growth disparities

5. CA deficit, competitivness and productivity

6. evaluation on policies

1. any as they all in theory should shift LRAS to the right

2. government spending on education and training. al;so LT healthcare. childcare, less benefits. lower tax rates

3. reduce power of trade unions. reduces costs of labour. reduces tructural unemployment rates as can then train them

4. gment spending on infrastructure. allows comute to other areas. healthcare and education increases productivity. tax credits subsidies and grants. tax incentives. enterprize zones

5. spending on education and training, infrastructure, competition policies

6. expensive to run all policies. time lags.