Supply-side policies are designed to help the economy grow and become more productive. However, they face some big challenges when it comes to tackling stagflation. Stagflation means the economy is not growing much, and prices are going up at the same time.

Key Challenges:

• Time Delay: Supply-side policies, like cutting taxes or reducing regulations, often take a while to work. This can be a problem when stagflation hits and quick action is needed.

• Low Demand Issues: These policies might not solve the problem of low demand. If people don’t feel confident in spending money, the effect of these policies can be weak during stagflation.

• Growing Inequality: The benefits of these policies can often go more to wealthy individuals, which can lead to more social tensions and problems.

Possible Solutions:

• Use smart spending policies alongside supply-side measures to help boost demand right away.

• Invest in education and training for workers to improve their skills. This can help tackle both rising prices and unemployment over time.

In the end, using a balanced approach could lead to better results when dealing with the challenges of stagflation.