Equally, if the potential excesses of his deregulatory agenda are kept in check, reducing bureaucratic red tape could promote growth and encourage competition, lowering prices over the longer term.
What impact will the next US administration have on economic growth and inflation? The answer is not yet clear because while some of President-elect Donald Trump’s proposed policies would boost growth and reduce inflation over time, others will have the opposite effect.
On the positive side of the ledger, Trump will be pro-business overall, and this fact alone could stimulate economic activity by unleashing the “animal spirits” that drive business investment, innovation, and growth. Growth should also benefit if he and congressional Republicans succeed in permanently extending the corporate and personal income tax cuts that will expire in 2025.
