What are the key differences between Keynesian and supply-side economic policies?

What are the key differences between Keynesian and supply-side economic policies?

Keynesian economics focuses on total spending in the economy and its effects on output and inflation, advocating for government intervention. Supply-side economics, on the other hand, emphasizes boosting economic growth by increasing the supply of goods and services, often through tax cuts and deregulation.

Can you explain how each policy affects unemployment?

Keynesian policies aim to reduce unemployment by increasing demand through government spending, while supply-side policies seek to lower unemployment by incentivizing production and investment through tax cuts.

Which policy has been more effective in recent economic crises?

The effectiveness can vary by context, but many argue that Keynesian policies have been more effective in addressing short-term economic downturns, while supply-side policies may foster long-term growth.

What are some real-world examples of each policy in action?

A notable example of Keynesian policy is the New Deal in the 1930s, while supply-side economics was prominently applied during the Reagan administration in the 1980s.