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SUPPLY-SIDE POLICIES - Coggle Diagram
SUPPLY-SIDE POLICIES
market-based
deregulation
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Limitations
Possible decrease in worker safety, health, work conditions and more negative effects on the community and enviroment
privatization
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This increases the overall efficiency as private companies have more incentive for maximization and efficiency
Limitations
If privatization is conducted incorrectly it may lead to the creation of monopolies, increased prices, decrease of supply and decrease of efficiency (see the tragedy of British Rail)
labour market reforms
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reduction in trade union power - by reducing the trade union power they wouldn't be able to negotiate for higher wages
limitations
possible reduction in living standards for low-income or unionized workers leading to increased income inequality
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trade liberalization
Another type of policy with intension to increase competition, but worldwide. Eliminating government intervention results in market liberalization and creation of a free trade, thus, foreign firms that are exporting goods would have to be more competetive and more efficient in order to compete with domestic producers.
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interventionist
policies
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Research and development
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guaranteeing intellectual property- patents and copyrights guaranteed by the government used to convince firms to invest in research
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