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Supply-side economists

Definition

Supply-side economists are economists who believe that economic growth can be stimulated by focusing on improving the productive capacity of an economy through supply-side policies. They emphasize the importance of reducing barriers for producers, such as high taxes or excessive regulation, which they argue can incentivize investment, innovation, and entrepreneurship.

Related terms

Demand-side economics: Demand-side economics refers to an approach that emphasizes stimulating consumer spending and aggregate demand in order to promote economic growth. It often involves government intervention through measures like fiscal stimulus.

Marginal tax rate: The marginal tax rate is the percentage of tax paid on an additional dollar of income earned. Supply-side economists argue for lower marginal tax rates as they believe it incentivizes work, investment, and risk-taking.

Pro-growth policies: Pro-growth policies are government actions or strategies aimed at fostering sustainable economic growth by encouraging investment, innovation, entrepreneurship, and productivity improvements. These policies align with the principles advocated by supply-side economists.

"Supply-side economists" appears in:

Practice Questions (2)

How do supply-side policies stimulate demand according to supply-side economists?
What do supply-side economists believe is the key to increasing real GDP without high inflation?

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