RI 2023 Supply-Side Policy

RAFFLES INSTITUTION YEAR 6 H2 ECONOMICS 2023 MACROECONOMIC POLICIES: SUPPLY SIDE POLICIES Contents 1 Introduction ................................................................................................................ 138 2 Objectives of Supply-Side Policies and its Impact .................................................... 138 3 Types of Supply-Side Policies ................................................................................... 139 3.1 Market-oriented Supply-Side Policies ................................................................ 139 3.1.1 Market-oriented Supply-Side Policies for Product Markets ......................... 139 3.1.2 Market-oriented Supply-Side Policies for Labour Markets ......................... 141 3.2 Interventionist Supply-Side Policies .................................................................. 143 4 Effects of Supply-side Policies on the Economy ....................................................... 148 4.1 Effect on Growth and Inflation ........................................................................... 148 4.2 Effect on Employment ........................................................................................ 150 4.3 Effect on Balance of Trade and Balance of Payments ...................................... 150 4.4 Effects on Standard of Living ................................................................ 150 5 Limitations of Supply-side Policies ............................................................... 151 Appendix 1: Trade Unions & Tripartism in Singapore ............................................. 152 References: Abel, Andrew B., & Bemanke, Ben S., Macroeconomics, 4th Edition, Addison-Wesley Froyen, Richard T., Macroeconomics: Theories and Policies, 6th Edition, Prentice Hall Gordon, Robert J., Macroeconomics, 8th Edition, Addison-Wesley Lispey, Richard G, Steiner, Peter 0, & Purvis, Douglas D, Economics, 9th Edition, Harper Collins Slavin, Stephen L., Macroeconomics, 8th Edition, McGraw-Hill Sloman, John, Economics, Prentice Hall Cook, Mark, & Healey, Nigel, Supply Side Policies, 4th Edition, Heinemann At the end of this lecture series on Supply-Side Policies, you should be able to: 1. Explain the general objective of supply-side policy 2. Analyse the Impact of these policies on cost of production, productive capacity, level of technology, degree of competition trade in goods and services and level of enterprise using AD- AS analysis. 3. Explain the various types of supply-side policies -for example, supply-side tax cuts, deregulation and competition policies, elimination of structural bottlenecks, removal of bureaucratic red-tape, promoting labour mobility and productivity. 4. Explain examples of supply-side policies implemented by the Singapore government. 5. Discuss how governments use supply-side policies (impacting AS) to achieve macroeconomic objectives. 6. Evaluate the effectiveness of supply-side policies -for exa