Supply-side economics and poverty reduction - A critique
Bangladesh, Dec. 4 -- There are two competing economic policies - supply side and demand side -- that are often considered and implemented by national governments when the economy slides into a recession. But when the economy is confronted with stagflation - a simultaneous occurrence of high inflation and recession -- the demand driven expansionary monetary and fiscal policies to increase output and employment aggravates inflation further (AD shifting rightward). Alternatively, combating inflation with contractionary aggregate demand (AD) policies would tame inflation (by shifting the AD leftward) but at the risk of a deeper recession. To fight the twin dilemma of stagflation or slow growth and inflation (as experienced in Bangladesh and In...
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