Why is supply side policy used a lot in modern economies?

Supply Side policy is basically anything that improves the long run growth of an economy. By that, we mean, anything that can help it grow in the long run sustainably, thereby avoiding 'bad' inflationary pressure usually experienced by a rapidly growing economy. Therefore, it is used alot by modern economy's, simply to improve on long run trend growth rate, so that these economy's are able to sustain a high level of growth. The 1970's was when Margaret Thatcher really introduced substantial supply side policies such as privatisation, a completely new tax system, that one can easily led to rapid growth in years to growth. Supply Side reform continued leading to upswing periods of growth, most notably, the 'NICE' period in 2003 (Non inflationary Continuous Growth). Education is a particuarly important SSP, and as you are probably aware, is being heavily reformed in the UK. Why? So that we have brighter students, that are more skilled and thus employable, therefore reducing the unemployment rate and having a skilled labour force that can support an ever growing population. 

WO
Answered by Will O. Economics tutor

4177 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

How should I answer 4 mark multi-choice questions?


Explain how a firm's costs of production are affected by the law of diminishing marginal returns in the short run (10)


Explain how government policies can reduce the natural rate of unemployment


Why does the MC Curve cut the AVC curve at the AVC Curve’s lowest point?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning