Trickle Down Theory

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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.
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Now, our growing understanding of the incentive problems created by a winner-take-all society poses an even more decisive challenge to trickle-down theory. Society's highest incomes accrue to the top performers in winner-take-all markets, which, as we have seen, persistently attract too many contestants.
The results, based as they are on the information collected from two developing countries, confirm the a priori expectation about the trickle-down theory of economic growth.
The beneficiaries through the trickle-down theory are another 7 percent.
And I write for people like me who are just tired of the trickle-down theory where some guy spends ages and pages in some fat book where everything including the draperies, which happen to be burnt orange, is described, and further, is some metaphor for something.
This is a notable application of the trickle-down theory of economic progress: As the banks become richer, they will lend more easily and the credit crunch will end.
* 'They' will benefit through the trickle-down theory.
Chapter 6, which opens Section 3, is a bold attempt at using the trickle-down theory of fashion to explain gender differences.
Would the trickle-down theory prevail, or would decisions be based on a preferential option for the poor?
Are we experiencing the result of the much touted "trickle-down theory?" I did not realize that it meant the trickling down of the value of our homes, savings, investments and pensions, nor surely the diminished confidence in our government.
It is fashionable in some intellectual circles to deride the trickle-down theory, technological change, and the Green Revolution as tools of the haves to exploit the have-nots.
But sections that could give discomfort to Thatcherite Conservatives are the advocacy of a bill of rights; the assertion of an "intimate relationship" between "political liberation" and "salvation"; the questioning of the trickle-down theory in economics; and the rejection of an "underclass" as a "price worth paying" for advantages to the majority.
NAFTA is essentially a corporate bill of rights, based on a trickle-down theory of development, on a growth model that raises huge sustainability questions and presumes the free market is going to answer all our questions.