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Trickle down theory is a near universal falsehood. It is in disfavor by many noted economists. Here is one study from Alesina, Alberto and Dani Rodrick. “Distribution, Political Conflict and Economic Growth, in The Political Economy of Business Cycles and Growth, M.I.T. Press, Cambridge, MA, 1992.The authors looked at a sample of 65 industrial nations and gleaned from data from the World Bank and the Organization for Economic Co-operation and Development.They found lower growth rates in countries where higher shares of national income went to the top 5 percent and the top 20 percent of earners. In contrast, larger shares for poor and middle-income groups were associated with higher growth rates. Again and again, the observed pattern is the opposite of the one predicted by trickle-down theory.
Trickle down theory is a near universal falsehood. It is in disfavor by many noted economists. Here is one study from Alesina, Alberto and Dani Rodrick. “Distribution, Political Conflict and Economic Growth, in The Political Economy of Business Cycles and Growth, M.I.T. Press, Cambridge, MA, 1992.
The authors looked at a sample of 65 industrial nations and gleaned from data from the World Bank and the Organization for Economic Co-operation and Development.
They found lower growth rates in countries where higher shares of national income went to the top 5 percent and the top 20 percent of earners. In contrast, larger shares for poor and middle-income groups were associated with higher growth rates. Again and again, the observed pattern is the opposite of the one predicted by trickle-down theory.
