YOU ARE BRILLIANT! I'VE CLASSIFIED ALMOST ALL YOUR VIDEOS AS UNDER 'FAVOURITE'! My economics textbook comes nowhere near the standard you display in a 7/8 minute video. That 'A' I'm hoping to achieve will MOST DEFINITELY be down to you. THANKYOU!
You literally have revolutionised my mind.. you also inspire me to work alot aswell and have made me very interested in economics and finance which I just have to thank you for.. :)
@ivanjrt No I didn't mention the Austrian view. Nor did I mention the Marxist view, or several others. What I did do is show how some pro-market observers would welcome increased flexibility of labour markets via the removal of legislation to give market forces room to breathe while evaluating that view with the notion that such policy could leave low-skilled workers vulnerable to exploitation, thus covering the majority of views. There isn't time for minority views like Austrian or Marxist etc.
Your teaching, in itself, is a MAJOR supply side improvement. :D brilliant teaching, improving education standards, and therefore the productivity of the future labour force ;)
I had my IB exam today, and just to let you know, you definately bumped me up a few grades! I'd just like to say thanks a lot, and let you know (which you probably already do), that you really help us and you might actually be the little difference I need to get accepted into med school! So thanks Phil, keep it up
Thank you for these videos, @pajholden. They are incredibly useful and easy to follow. I have never read on supply-side policies and your video taught me everything I need to know for my exams tomorrow.
so i had a AS exam today , and the 25 marker was on this and i watched the video before i went into the exam and i was soo happy cause i knew what to write :D
In deed you make a great point by stressing the fact that "supply side" can mean _any_ policy which govt can use to increase the productivity and output (like Keynesianism in the _short_ run, but, of course it (Keynesianism) doesn't exactly increase competitiveness, which is bad, especially in the long run, and not just for that reason but also due to the fact of the misallocation of scarce resources [which have alternative uses] that inevitably ensues, resulting in asymmetric failures, inflationary bubbles, and of course not to mention that all of this causes--HIGHER PRICES.
"I hope that makes some sense" Are you kidding me? You're an awesome teacher! :P Thanks! Keep the videos coming! (P.s just incase your curious about your target market or whatever: im studying this in year 10!)
@ratchettie I'm not sure if I am in a position to answer this, studying myself, but I believe that subsidies are supply side policies as they aren't being given out to individuals to consume. These subsidies are bring given to firms with specific "rules", these can include that they must be put into only increasing output, or that they cannot be utilized to increase wages of the managerial members of the firms etc. Seeing as they are limited towards production, it must be a supply side policy.
Thanks for posting this, I'm a home schooler studying A-level and this is one of the main topics I am learning about, its nice to have someone speak it to me, it helps me understand the textbook better. The problems I am having are more with the fiscal and montary policies, especially quantitive easing, I can understand them by themselves but when it comes to the implications and trades offs I get a little muddled up. Do you have any videos on this? If not could you be so kind as to make some?
Some points are controversial. 1 The relationship between Minimum wage and Unemployment rate. The final equilibrium of labor market is decided by both the supply and demand sides. It is possible that decreasing the minimum wage make the job not attractive enough. So people may stay unemployed and enterprises can't recruit enough people. But I do agree that flexibility is very important. 2 The example regarding to soft loans is a bit too general. Banks (not investment banks) have strong to avoid long term and risky loans. And some fundamental revolution is a long term and risky process. And soft loans is necessary.
Yep you can argue that as a conflict in policies. You can use this as an evaluation point for questions about policies. Other conflicting policies include: contractionary fiscal policy (raising tax/cutting govts spending) will conflict with supply side policies as it will reduce AS
"Short term costs for future gains is not something that politicians like very much." That may or may not be true, depending of course, though it should also be noted that under the popularly understood concept of "supply-side" economics, any such ['supply-side'] policy could only mean _REDUCING_ costs, because definitively speaking you could not be taking from the supply-side sector to give to the demand-side, otherwise that would be "demand-side" economics, which definitively speaking is eliminated through supply-side policy just as supply-side policy is eliminated through demand-side policy. It's like this: Demand-side policy has to _take_ form the supply -side--that's the only way it can operate, whereas supply side policy _does not_ involve _taking_ from the demand-side in order to give to the supply-side. It simply involves _NOT_ taking from much less _giving_ to anyone. Question: If "demand-side" means taking from the supply-side and giving it to the demand-side, does that mean that supply is the _"opposite"_ of this (i.e. "TAKING from the demand-side and then redistributing this to the supply-side)???? Certainly not. But _that_ is the insinuation made by proponents of the absurdity that is demand-side so-called "economics." In my view, what they call "supply-side" doesn't mean taking from _anyone_ to invest in any kind of economic growth for anyone else, no matter who it would be, but rather, is simply the _absence_ of any such policies that would otherwise take away from the supply-side. Though, I can certainly see how an investment that lowers costs of production (even if in the long run) in one way could be considered a supply-side policy in that respect, though this investment is also a _cost_ to the very same supply-side, so in-order to really qualify such things as education or infrastructure as a supply-side policy I guess utlimately really comes down to the difference between their immediate costs and external benefits.
You said in the definition is supply side policies aim to reduce costs for firms in hope to increase LRAS, But isn't decreasing production costs only going to increase SRAS?
Im doing Edexcel. I wish you all the best and hope you can ace the exam. Im also looking forward for something about how government can achieve growth to pop up :D
I have a question- You stated that subsidies could be used for supply side policies. However by having extra revenue, aren't these firms potentially increasing consumption ? And since C is a component of Aggregate Demand, wouldn't it shift the AD curve to the right? I see a subsidy as more of a demand side policy and not so much a supply side policy. Could you explain this to me plz? :) And I love your videos!! :)
In the second paragraph, I said how supply side policies decrease inflation rate by pushing out LRAS but it provides no short term solution so said demand side policy is also needed with combination with this etc.. Then mentioned current state of economy, UK in recession so supply side policy would actually provide an AD stimulus in the short run, helping economic growth while reducing inflation in the long run. I used Keynesian model diagram in this paragraph
The examiners favourite one is co-operation tax. I believe this is the best supply side policy anyway. Although governments revenue is likely to decrease but it would help the firms to increase international competitiveness. :) Hope I'm right. Who is doing AS Unit 2 Economic exam on Friday?. @pajholden you saved my life in less than 20 min :)
Top video Paj! However when governments subsidise firms maybe they are trying to make them more price competitive in terms of foreign firms. Also banks are not lending due to a lack of confidence not because firms don't have good ideas....
Fall in exchange rate = higher price of imports, cheaper exports, exports more competitive internationally, X-M is component of AD, AD can shift rightwards to contribute to inflationary pressures. (4 marks diagram, 2 marks inflation definition, 6-8 marks explanation) For 25 mark question I did page long paragraph on increasing interest rates, explained it, evaluated it's effectiveness & disadvantages and included a diagram. In second page long paragraph, I wrote about Supply Side policies.
Would you say that the private market can in certain cases drive the price up? To me, it seems as if an insurence company that has 30% profit (30% of the money you pay for insurence does not go to covering expenses) will become more expensive simply because it is private.
so basically the increase of AS1 to AS2 means there is more scope for expansion in the economy, increase in competition? (economic growth) .. any reply would be appreciated.
@pajholden thanks for the lovely comment. I have a worksheet on how exactly to write that 30 mark essay at the end of edexcel's unit 2. Would you like it? Send me your e-mail or find me on facebook. Best wishes, Phil Holden
It seems awful strange to me that investment in education spending would be considered a "supply-side" policy. I mean, if you think about it, it is paid for (in a public system) through taxes, which comes out of both the supply and demand sides in any way that these can be viewed, and so, in the realest sense, it is actually more of a "demand-side" policy, in my view, because it is a redistribution of wealth, though not really, because it actually comes at an expense to all tax-paying parties within a national economy. So, with that said I would hardly classify it as _either_ a "demand" _or_ "supply"-side policy. It shrinks BOTH, whilst also creating positive externalities none the less. In my view, to refer to education spending as a "supply-side" policy simply because of the fact that the supply-side sector of the economy receives an external benefit (as if this is no the case for _all_ sectors of the economy), is tantamount to referring to demand-side policy or theory as "supply-side" policy.
very well explained, but the thing you i think you could add in is which type of economist would approach which type of policy ie interventionist... keyenesian....
So if you increase AS when AD is low do you increase unemployment? As AS shifts outward the gap between full employment and equilibrium gets larger which means there is more unemployed resources in the economy even though labour supply remains the same (or does it increase due to the AS shift?) and the same amount of people are employed as before the AS shift even though the diagram shows more unemployment.
+Alex Smith But the question remains; what's the benefit of increased AS if AD falls or is falling? Think of it this way: what good is it if a restaurant increases the number of tables, replaces its aging stove for a new one, retrains the chef in modern cooking techniques and hires low wage wait staff if no one comes into the restaurant to eat?
You could also say, the increase in jobs leads to more people having disposable income, which boosts AD and may have the negative impact of demand pull inflation.
Hi Please move your camera CLOSER when drawing diagrams for us non economists to get that visual representation in detail in future. Otherwise that was really informative. The tax element at the end a little confusing to me; will have to think about that.
@Galileo0601 right I see what you mean. In that case, yeah I see how it could be a supply-side policy. Which syllabus do you follow? I'm doing the IB, just had my exams today and Phil helped me so much lol Having 3rd paper tomorow gaaaa
That things like the minimum wage and Trade Union pay are _'meant'_ (key word there) to "protect the worker from exploitation" may be true in the minds of many people, in their sincere intent of such policies, but it _is not_ the true intent of many people. For example, many people have advocated for a min wage law and higher union pay precisely _because_ they know it will benefit them at the expense of others, by _eliminating_ those who are younger, less experienced, less skilled, or who do not speak the native language.
I think one of if not the most needed supply-side economic policies is to get rid of the exorbitantly excessive govt bureaucracies hampering entrepreneurial growth. It's gotten insane. It's impossible for anyone to start up a business, much less compete.
This was a huge help, especially when you evaluated the policies. Thanks!
I have got a single word for you sir: and that is "wow" your ideas and the way of explanations and reasoning are awesome ! Thanks
ur explaintaions are
1] easy to understand.
2] simple language.
3] highly helpful for the working class.
in general SUPERB
Omg, some ppl don't realize this is generalistic economics for ppl who are just beginning to learn it. Thank u for the help throughout IB!!
Really helpful video, helped me so much for AS last year and again for revision this year, thankyou very much sir :)
YOU ARE BRILLIANT! I'VE CLASSIFIED ALMOST ALL YOUR VIDEOS AS UNDER 'FAVOURITE'! My economics textbook comes nowhere near the standard you display in a 7/8 minute video. That 'A' I'm hoping to achieve will MOST DEFINITELY be down to you. THANKYOU!
Last of your videos watched before my final A-level Economics today! Thank you, paj, you have been amazing.
you are literally the greatest teacher of all time.
You literally have revolutionised my mind.. you also inspire me to work alot aswell and have made me very interested in economics and finance which I just have to thank you for.. :)
Thank you, have my econ exams soon and need all the help i need, your a life saver.
Who else is doing some cheeky last minute check ups before tomorrow's resit.....
lol how did it end up going bro?
No
@ivanjrt No I didn't mention the Austrian view. Nor did I mention the Marxist view, or several others. What I did do is show how some pro-market observers would welcome increased flexibility of labour markets via the removal of legislation to give market forces room to breathe while evaluating that view with the notion that such policy could leave low-skilled workers vulnerable to exploitation, thus covering the majority of views. There isn't time for minority views like Austrian or Marxist etc.
You're an economic ninja, I wish you were my economics teacher!
Your teaching, in itself, is a MAJOR supply side improvement. :D brilliant teaching, improving education standards, and therefore the productivity of the future labour force ;)
Your videos are absolutely brilliant, a great addition to teaching at schools; thank you for putting all the time and effort in that you do
Scottish higher economics pupil, found this really helpful, keep up the good work!
thank you so much! The best tutor i have ever seen
I had my IB exam today, and just to let you know, you definately bumped me up a few grades! I'd just like to say thanks a lot, and let you know (which you probably already do), that you really help us and you might actually be the little difference I need to get accepted into med school! So thanks Phil, keep it up
Got it in like 2 hours, doing a quick review hahah this guy, my friend, is truly a hero.
Thank you for these videos, @pajholden. They are incredibly useful and easy to follow. I have never read on supply-side policies and your video taught me everything I need to know for my exams tomorrow.
this man is going to save my year 1 a level end of years
Thank you so much! My teacher doesn't teach us everything we need for the exam, but you do!
so i had a AS exam today , and the 25 marker was on this and i watched the video before i went into the exam and i was soo happy cause i knew what to write :D
Just watched it again, can't get enough of this!!!
This guy is a hero, so good at explaining stuff.
Woah! I wish you would be my Eco tutor. extremely helpful.
Thanks so much! I wish I have a lecturer like you!
You are a life saver. Thank you ssssooooooo much! i wish you could teach at my school!
Basically copied this video out word for word in my exam today thanks
Please keep the videos coming! Such an excellent revision tool for budding economists, really appreciate them. #HoldenForGreekPrimeMinister
Omg thx so much phil!!! My exams are next week and I'm so glad you posted 2 videos!!! :D Thank you soo much :) :)
In deed you make a great point by stressing the fact that "supply side" can mean _any_ policy which govt can use to increase the productivity and output (like Keynesianism in the _short_ run, but, of course it (Keynesianism) doesn't exactly increase competitiveness, which is bad, especially in the long run, and not just for that reason but also due to the fact of the misallocation of scarce resources [which have alternative uses] that inevitably ensues, resulting in asymmetric failures, inflationary bubbles, and of course not to mention that all of this causes--HIGHER PRICES.
Awesome, really helped me understand Supply Side Economics.
I'll say you did do a pretty good job of explaining the graph. So you get points for that :)
you will be the sole reason for my pass grade this summer..
"I hope that makes some sense"
Are you kidding me? You're an awesome teacher! :P Thanks! Keep the videos coming!
(P.s just incase your curious about your target market or whatever: im studying this in year 10!)
@ratchettie I'm not sure if I am in a position to answer this, studying myself, but I believe that subsidies are supply side policies as they aren't being given out to individuals to consume. These subsidies are bring given to firms with specific "rules", these can include that they must be put into only increasing output, or that they cannot be utilized to increase wages of the managerial members of the firms etc. Seeing as they are limited towards production, it must be a supply side policy.
It's that time of year again where your views go up! Can't thank you enough for this! :D
Thanks for posting this, I'm a home schooler studying A-level and this is one of the main topics I am learning about, its nice to have someone speak it to me, it helps me understand the textbook better. The problems I am having are more with the fiscal and montary policies, especially quantitive easing, I can understand them by themselves but when it comes to the implications and trades offs I get a little muddled up. Do you have any videos on this? If not could you be so kind as to make some?
Some points are controversial. 1 The relationship between Minimum wage and Unemployment rate. The final equilibrium of labor market is decided by both the supply and demand sides. It is possible that decreasing the minimum wage make the job not attractive enough. So people may stay unemployed and enterprises can't recruit enough people. But I do agree that flexibility is very important. 2 The example regarding to soft loans is a bit too general. Banks (not investment banks) have strong to avoid long term and risky loans. And some fundamental revolution is a long term and risky process. And soft loans is necessary.
Thanks, it well explainable and summarized.
this is the best form of education and training.
Absolute legend. I think selfless people like this end up being the chillest people ever. Seriously my book is shit an this guy explains it perfectly.
this came up on my exam today, you're a legend mate!!! :D
this came up today in todays AS .. you absolute god!
Out of curiosity, are these for A level students, or just general economic enthusiasts?
(You're video's have really helped me with my A levels :D )
Yep you can argue that as a conflict in policies. You can use this as an evaluation point for questions about policies. Other conflicting policies include: contractionary fiscal policy (raising tax/cutting govts spending) will conflict with supply side policies as it will reduce AS
looking damn fly in this video boss
"Short term costs for future gains is not something that politicians like very much."
That may or may not be true, depending of course, though it should also be noted that under the popularly understood concept of "supply-side" economics, any such ['supply-side'] policy could only mean _REDUCING_ costs, because definitively speaking you could not be taking from the supply-side sector to give to the demand-side, otherwise that would be "demand-side" economics, which definitively speaking is eliminated through supply-side policy just as supply-side policy is eliminated through demand-side policy.
It's like this: Demand-side policy has to _take_ form the supply -side--that's the only way it can operate, whereas supply side policy _does not_ involve _taking_ from the demand-side in order to give to the supply-side. It simply involves _NOT_ taking from much less _giving_ to anyone.
Question: If "demand-side" means taking from the supply-side and giving it to the demand-side, does that mean that supply is the _"opposite"_ of this (i.e. "TAKING from the demand-side and then redistributing this to the supply-side)???? Certainly not. But _that_ is the insinuation made by proponents of the absurdity that is demand-side so-called "economics."
In my view, what they call "supply-side" doesn't mean taking from _anyone_ to invest in any kind of economic growth for anyone else, no matter who it would be, but rather, is simply the _absence_ of any such policies that would otherwise take away from the supply-side.
Though, I can certainly see how an investment that lowers costs of production (even if in the long run) in one way could be considered a supply-side policy in that respect, though this investment is also a _cost_ to the very same supply-side, so in-order to really qualify such things as education or infrastructure as a supply-side policy I guess utlimately really comes down to the difference between their immediate costs and external benefits.
Thank you very much - very well explained.
you are one awesome person, how on earth did you know my AS macroeconomics was coming up in less than 3 weeks??
Edexcel Unit 2 always has a supply side policy question of 30 marks .I might just score a 30/30 :) .Thank you ,it was really helpful .
Thanks a lot for the great video :D Got my A2 exam tomorrow.
i cannot image how well my grade will be if you are my eco tutor
Fongyuen Ko well?
Thank you very much I greatly needed this, a thank you from Bath!
great , anothe helpful and intuitive video.. Thanks
You said in the definition is supply side policies aim to reduce costs for firms in hope to increase LRAS, But isn't decreasing production costs only going to increase SRAS?
I would just like to take the pleasure in saying that you OWNED!! our friend ivanjrt
Im doing Edexcel. I wish you all the best and hope you can ace the exam. Im also looking forward for something about how government can achieve growth to pop up :D
@ratchettie Me too. HL or SL? I did question 1 for P1. Though 3 was also a viable option
I have a question- You stated that subsidies could be used for supply side policies. However by having extra revenue, aren't these firms potentially increasing consumption ? And since C is a component of Aggregate Demand, wouldn't it shift the AD curve to the right? I see a subsidy as more of a demand side policy and not so much a supply side policy. Could you explain this to me plz? :) And I love your videos!! :)
you're videos are so helpful!!! thank you :-)
thanks man... keep these videos comming,, because you havent posted many recently!
In the second paragraph, I said how supply side policies decrease inflation rate by pushing out LRAS but it provides no short term solution so said demand side policy is also needed with combination with this etc.. Then mentioned current state of economy, UK in recession so supply side policy would actually provide an AD stimulus in the short run, helping economic growth while reducing inflation in the long run. I used Keynesian model diagram in this paragraph
What does AD stand for in the AD curve - couldnt see any explanation?
Your videos are great, thanks very much!
The examiners favourite one is co-operation tax. I believe this is the best supply side policy anyway. Although governments revenue is likely to decrease but it would help the firms to increase international competitiveness. :) Hope I'm right. Who is doing AS Unit 2 Economic exam on Friday?. @pajholden you saved my life in less than 20 min :)
Heartfelt thanks to you Sir
Brilliant stuff Phil.
Top video Paj! However when governments subsidise firms maybe they are trying to make them more price competitive in terms of foreign firms. Also banks are not lending due to a lack of confidence not because firms don't have good ideas....
Fall in exchange rate = higher price of imports, cheaper exports, exports more competitive internationally, X-M is component of AD, AD can shift rightwards to contribute to inflationary pressures. (4 marks diagram, 2 marks inflation definition, 6-8 marks explanation) For 25 mark question I did page long paragraph on increasing interest rates, explained it, evaluated it's effectiveness & disadvantages and included a diagram. In second page long paragraph, I wrote about Supply Side policies.
Would you say that the private market can in certain cases drive the price up? To me, it seems as if an insurence company that has 30% profit (30% of the money you pay for insurence does not go to covering expenses) will become more expensive simply because it is private.
Thank you
as choclatee89 says an app would be the next step for you, you've already got the demand!
great video on what can be a confusing topic, thanks for the vid! :)
so basically the increase of AS1 to AS2 means there is more scope for expansion in the economy, increase in competition? (economic growth) .. any reply would be appreciated.
@pajholden thanks for the lovely comment. I have a worksheet on how exactly to write that 30 mark essay at the end of edexcel's unit 2. Would you like it? Send me your e-mail or find me on facebook. Best wishes,
Phil Holden
It seems awful strange to me that investment in education spending would be considered a "supply-side" policy. I mean, if you think about it, it is paid for (in a public system) through taxes, which comes out of both the supply and demand sides in any way that these can be viewed, and so, in the realest sense, it is actually more of a "demand-side" policy, in my view, because it is a redistribution of wealth, though not really, because it actually comes at an expense to all tax-paying parties within a national economy. So, with that said I would hardly classify it as _either_ a "demand" _or_ "supply"-side policy. It shrinks BOTH, whilst also creating positive externalities none the less.
In my view, to refer to education spending as a "supply-side" policy simply because of the fact that the supply-side sector of the economy receives an external benefit (as if this is no the case for _all_ sectors of the economy), is tantamount to referring to demand-side policy or theory as "supply-side" policy.
very well explained, but the thing you i think you could add in is which type of economist would approach which type of policy ie interventionist... keyenesian....
I think because this is more of a long run prospect it's keyenesian hence the LRAS curve :)
He did, to a small extent, with the comparison between keyenesian and monetarist ideas towards the end.
Thanks Phil! Love your vids, they are a great help!
same here!
Good Luck!!
Great stuff! It would be a bit more helpful if you could categorise the videos into playlists of different topics
Thank you so much very helpful and coherent!!
So if you increase AS when AD is low do you increase unemployment? As AS shifts outward the gap between full employment and equilibrium gets larger which means there is more unemployed resources in the economy even though labour supply remains the same (or does it increase due to the AS shift?) and the same amount of people are employed as before the AS shift even though the diagram shows more unemployment.
+Alex Smith But the question remains; what's the benefit of increased AS if AD falls or is falling? Think of it this way: what good is it if a restaurant increases the number of tables, replaces its aging stove for a new one, retrains the chef in modern cooking techniques and hires low wage wait staff if no one comes into the restaurant to eat?
Great video.... keep em coming pls ! thx..
OMFG!!!! This is just what I needed!!!! THANK YOU SOOO MUCH!!!
@wduwtn thank you - very kind of you!
@bigrock123 thank you!!! And good to you too :D hope supplyside policies come up, they're my favourite ;D
love your videos .. you should make more
This is fantastic, thanks a lot.
As always, excellent.
Mr Holden do you have notes made of these youtube videos you do, they are amazing videos and if possible would like some notes pls
Thank you
You could also say, the increase in jobs leads to more people having disposable income, which boosts AD and may have the negative impact of demand pull inflation.
How does investment in education lower costs for firms? Is it just the increase in productivity?
Hi Please move your camera CLOSER when drawing diagrams for us non economists to get that visual representation in detail in future. Otherwise that was really informative. The tax element at the end a little confusing to me; will have to think about that.
@Galileo0601
right I see what you mean. In that case, yeah I see how it could be a supply-side policy. Which syllabus do you follow? I'm doing the IB, just had my exams today and Phil helped me so much lol Having 3rd paper tomorow gaaaa
Thank you a mil!
what do you think the 30 mark question will be on
That things like the minimum wage and Trade Union pay are _'meant'_ (key word there) to "protect the worker from exploitation" may be true in the minds of many people, in their sincere intent of such policies, but it _is not_ the true intent of many people. For example, many people have advocated for a min wage law and higher union pay precisely _because_ they know it will benefit them at the expense of others, by _eliminating_ those who are younger, less experienced, less skilled, or who do not speak the native language.
thank you! very very helpful! exam's in 2 hours...!
I think one of if not the most needed supply-side economic policies is to get rid of the exorbitantly excessive govt bureaucracies hampering entrepreneurial growth. It's gotten insane. It's impossible for anyone to start up a business, much less compete.
You're all over the place! Haha :P
Meghana Gavireddy
:)