The 1920s are considered to be a time when the government pretty much got out of the way of business and allowed it to operate as it pleased. Conservative historians, in particular, believe that this laissez-faire attitude is what encouraged economic growth.
For example, the Republican governments of the '20s did not do much to enforce the antitrust regulations that had been put in place by the Progressives. This allowed businesses to increase in size and to, therefore, become more efficient.
In addition to this sort of "hands-off" attitude, the Republican administrations also cut taxes of all sorts. Economic historians argue that this gave people more of an incentive to work and to invest. By doing so, they argue, the government promoted growth.
The 1920s are seen, especially by conservatives, as a time that shows how important it is for government to cut taxes and regulations. This, they say, caused the economy to grow in the 1920s.