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How does supply-side economics differ from Keynesian economics?

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Answer:

Supply-side economics focuses on increasing overall supply (goods and services produced) in the long run. This is done by increasing the availability of capital, labor, and technology. Keynesian economics, or at least the part that everyone talks about, focuses on demand-side economics. This is the famous 'spend your way out of a recession' argument. Keynes put forward that the government could take the place of consumers during a recession and spend enough money to restart the economy. This is obviously a short term policy meant to be used only under dire circumstances. The primary difference between the two is therefore (1) the time period to which they pertain and (2) which side of the demand-supply equation they focus on.

First answer by ID1129338757. Last edit by Giffen. Contributor trust: 0 [recommend contributor ]. Question popularity: 1 [recommend question].

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