Supply-Side Economics

Definition

Supply-side economics is an economic theory that focuses on policies aimed at increasing the production capacity and efficiency of an economy. It emphasizes reducing barriers for businesses, such as taxes and regulations, in order to stimulate economic growth.

Related terms

Laffer Curve: The Laffer Curve illustrates the relationship between tax rates and government revenue. It suggests that there is an optimal tax rate where revenue is maximized before diminishing returns occur.

Deregulation: Deregulation refers to reducing or eliminating government regulations on industries or sectors, allowing for more competition and potentially stimulating economic growth.

Productivity: Productivity measures how efficiently inputs are transformed into outputs within an economy. Increasing productivity can lead to higher economic growth.