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.