Government policy has always had a significant influence on economic growth and new business formation. During the past two decades, policy uncertainty has grown in the United States as the polarization of the electorate has intensified. The stark political differences are increasingly on display by elected officials in Washington. The recent political brinksmanship surrounding the so-called “Fiscal Cliff” is one example of the costly policy uncertainty facing U.S. businesses that is now endemic in Washington. While much of the focus of the Fiscal Cliff debate was on the constituents who would lose benefits or see their taxes increase, there was less attention to the debilitating impact of poorly fashioned policies, and policy uncertainty, on the nation's businesses and the impact on the economy. Those issues were most significant for small businesses and entrepreneurship, which account for more than fifty percent of U.S. private sector economic activity. Through a review of the literature, this paper examined the consequences of government policy uncertainly and sought to identify gaps in the related literature, especially those arising from the application of new policy tools. The research found that contemporaneous monetary policy may be having a greater impact upon business activity than previously identified and is an area in need of further study. While the policy uncertainty and its impact on business expansion discussed in this paper are principally associated with the U.S., the implications can be readily applied across borders. The results of this analysis will be helpful in enhancing the understanding of these important policy issues, which are commonly excluded from policy debate and often given insufficient treatment in post-secondary institutions of management practice.
Bryan, J. (2013, October 18). The Impact of Government Policy on Economic Growth. Paper presented at The Collaborative European Research Conference, CERC 2013, Cork Institute of Technology, Cork, Ireland, (pp. 140-149).
Virtual Commons Citation
Bryan, Jon L. (2013). The Impact of Government Policy on Economic Growth. In Management Faculty Publications. Paper 23.
Available at: http://vc.bridgew.edu/management_fac/23