Benefits of Supply side policies

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  • Benefits of Supply Side Policies
    • Lower Inflation
      • Shifting aggregate supply to the right will cause a lower price level.
      • By making the economy more efficient supply side policies will help reduce cost push inflation
    • Lower Unemployment
      • Supply Side policies can help reduce structural, frictional and real wage unemployment and therefore help reduce the natural rate of unemployment
    • Improved economic growth
      • Supply side policies will increase the sustainable rate of economic growth by increasing aggregate supply/
    • Improved trade & balance of Payments
      • By making firms more productive & competitive they will be able to export more.

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