According to Keynesian economics the state can stimulate economic growth and improve stability in the private sector - through, for example, interest rates, taxation and public projects. It's a response to depression in 1930s... No automatic mechanism to equilibrium...
Republican (freshwater: Chicago):
Supply Side economics is a school of macroeconomic thought that argues that economic growth can be most effectively created using incentives for people to produce (supply) goods and services, such as adjusting income tax and capital gains tax rates.
Supply-side supporters disagreed with Chicago school monetarist Milton Friedman by arguing that cutting tax rates alone would be sufficient to grow GDP, lift tax revenues and balance the budget.
Friedman, however, retained a more conventional monetarist view, believing that while tax cuts were on the whole desirable, money supply was the crucial variable.
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