What policies have western scholars put forward to promote economic growth?

Macroeconomic policies to promote economic growth mainly include:

1. Improve the quantity and quality of labor force, such as birth policy and immigration policy. Ways to increase the labor force include increasing the birth rate and encouraging immigrants to enter the country. The way to improve the quality of labor force is to increase investment in human capital. Stimulate economic growth through labor force.

2. Capital accumulation, such as active monetary policy and tax policy. Capital accumulation mainly comes from savings, and people can be encouraged to save by reducing taxes and raising interest rates.

3. Technological progress, such as various technical support policies. Technological progress is playing an increasingly important role in modern economic growth. Therefore, promoting technological progress has become the focus of economic policies in various countries.

4. Balanced growth in a planned way. The coordinated growth among various departments in modern economy is required by the economy itself, and the national planning and coordination should be realized by indirect means.

5. Improve the money supply, which is manifested in open market purchase, reducing the discount rate and reducing the statutory reserve ratio. The above policies can promote economic growth in the short term.

The theoretical basis of macroeconomic policy is the theory that the total demand of Keynesian economics determines the national income, that is, the IS-LM model. The model explains how the interest rate and national income are determined when the commodity market and the money market reach equilibrium at the same time, and points out what influence the position change of the IS curve and LM curve in the model will have on the balanced interest rate level and national income level. This model is a tool to analyze the effects of fiscal policy and monetary policy.

In different regions of LM curve, the effectiveness of fiscal policy and monetary policy varies greatly. LM curve can be presented in three forms: horizontal, incremental and vertical. Accordingly, LM curve can be divided into Keynesian area (depression area), middle area and classical area.