Demand-led growth

Demand-led growth is the foundation of an economic theory claiming that an increase in aggregate demand will ultimately cause an increase in total output in the long run. This is based on a hypothetical sequence of events where an increase in demand will, in effect, stimulate an increase in supply (within resource limitations). This stands in opposition to the common neo-classical theory that demand follows supply, and consequently, that supply determines growth in the long run.

Demand-led growth

Demand-led growth is the foundation of an economic theory claiming that an increase in aggregate demand will ultimately cause an increase in total output in the long run. This is based on a hypothetical sequence of events where an increase in demand will, in effect, stimulate an increase in supply (within resource limitations). This stands in opposition to the common neo-classical theory that demand follows supply, and consequently, that supply determines growth in the long run.