economic growth policies

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Economic growth policies are actions taken by a government to increase the speed of actual growth and expand the potential growth of a country’s economy.

These policies generally fall into two categories:

  • Demand-side policies: These include fiscal and monetary measures designed to boost aggregate demand.
  • Supply-side policies: These involve investments in infrastructure, education, and technology to improve productive capacity.

The main goal of supply-side policies is to shift the long-run aggregate supply to the right, which supports a higher and more sustainable rate of growth. The success of these policies often depends on the current state of the economy and outside global factors.