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Trickle-down economics

Popular label for claims that benefits to high earners or investors eventually reach workers—often criticized as oversimplified or unsupported.

Serious supply-side analysis focuses on marginal incentives to work, invest, and take risk; “trickle-down” is more political shorthand than a textbook model, but it names the suspicion that gains concentrated at the top need not reach middle and lower earners quickly—or at all.

Evidence

Empirical work on tax cuts and growth is mixed and sensitive to time horizon, openness to capital flows, and what happens to transfers. Most economists treat distribution as inseparable from aggregate claims: higher GDP with flat or falling median pay is a different policy success than broad wage growth.

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