Trickle down


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Trickle down

An economic theory that the support of businesses that allows them to flourish will eventually benefit middle- and lower-income people, in the form of increased economic activity and reduced unemployment.

Trickle Down Theory

An informal term for a macroeconomic theory that a government can best promote growth by providing incentives for persons to produce goods and services. The primary way a government does this is by maintaining low tax rates so that investors and entrepreneurs may invest their money in production. Maintaining low tax rates on the wealthy is one of the most important and controversial aspects of trickle down theory; the theory states that if well off persons have the capital available to produce goods and services, they create jobs and thereby grow the economy. In other words, the growth "trickles down" from the wealthy to the remainder of the economy. Critics contend that this does not happen in reality and that the wealthy are more likely to keep, rather than invest, their money. In the United States, trickle down theory was crucial to the economic policy of the Ronald Reagan administration. See also: Keynesian economics, Monetarism, Thatcherism.
References in periodicals archive ?
That is, use the money to trickle down benefits to the rest of us.
Throughout 2003, the negative effect will trickle down through the Indonesian economy as an estimated 8 million tourism-related workers are impacted.
They are wise to promote dialogue among religious leaders with the hope that it will both modify doctrines and trickle down to the congregations, perhaps to re-kindle a sense of purpose around a relevant and current crisis.
Given Peru's inadequate trickle down of wealth, GDP expansion must exceed 6 percent per annum in order to significantly improve the well-being of the average household.
OTTAWA -- Social service agencies are experiencing a trickle down effect following cuts made last June by the Community Care Access Centre (CCAC), said a draft report by Ottawa's People Services department.
NYSE' MOB), it takes a while for the glad tidings to trickle down to oil-equipment makers like Input/Output.
As the unnaturally bright, harsh colors trickle down, hair and clothing dissolve into abstractions, features become grotesquely misshapen and smeared.
But, as with many technological advances, trickle down occurs that allows for the application of these technological developments to mainstream industries.
Seigneur said viable Internet services soon will trickle down to midsize and small firms.
To avoid another pressure surge, engineers devised a method of opening fuel valves for just a few hendredths of a second at a time, allowing the high-pressure fuel to trickle down the pipe.
So when George Bush says jobs will flow And money trickle down below If Wall Street types who buy and sell Can keep the gains when they do well, Remember Stockman, White House snitch.
Small office/home office (SOHO) and small businesses (SMB) together make up a segment of customers that is often taken for granted by suppliers, who treat them as a captive market with few choices but product or service adaptations that trickle down from the higher reaches of the business market.