Market-based supply policies boost long-run aggregate supply not by injecting government spending, but by changing the rules of the game so firms and workers face stronger reasons to invest, innovate and compete. Drag the slider to increase policy intensity and watch how incentive pressure reshapes the supply curve.
Lower company tax raises the after-tax return on investment, pulling capital into the economy and lifting the marginal product of labour. Personal income tax cuts strengthen the incentive to supply additional hours or upskill. Both shift LRAS right by raising the economy's productive capacity without requiring government to pick winners or fund specific projects. The key is sharpening the return to effort and enterprise across all sectors simultaneously.
Market-based supply policies expand long-run aggregate supply by raising incentives to invest, work and compete rather than directly funding infrastructure or training.