Supply-Side Policies Affect Market Productivity During the Recession? (Essay Sample)

How Do Supply-Side Policies Affect Market Productivity During the Recession?
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How Do Supply-Side Policies Affect Market Productivity during the Recession?
Economic recessions are particularly troubling times for economies where growth is halted, incomes are lost, and households fail to afford products and services. A recession can be described as a tipping point in the economic cycle where an ongoing growth at the peak reverses and changes into an enduring market contraction (Amadeo, 2020). In other words, a recession represents a significant decline in the economic activity which lasts several months and is usually reflected through the changes in the real income, gross domestic product (GDP), and wholesale and retail prices among others. The governments make efforts to help the country in this situation, often through the use of various policies. In this case, the supply-side policies and their implications on market productivity are considered. These policies focus on aspects such as taxes, government benefits, and labor regulations
Research has presented a divided opinion on the questions of whether the supply-side policies are the best solutions to help a country out of recession. In history, there are cases in which these policies worked, for example, Germany and the USA, and other cases where they were considered a failure, for example, France. However, it can be argued that the success of these policies depends on whether or not the extent to which the traditional Keynesian models are used and other factors such as inflation come into play to support the supply-side policies. This paper examines the effect of supply-side policies and market productivity during a recession. An argument that these policies are inadequate will be examined and solutions will be recommended.