Saturday, June 2, 2012

Trickle-Down Economics: Does Anyone Actually Believe In It?

The words “trickle down” imply that if you redistribute money to the wealthy, they will spend it (say, by hiring workers or by buying products) and it will somehow find its way into the hands of the poor. To the extent that any economists endorse such a notion, they are emphatically not free market economists.
Read it at Neighborhood Effects
Trickle-Down Economics: Does Anyone Actually Believe In It?
By Matt Mitchell

A couple weeks back I offered Michael Edesess mathematical perspective that a Lack of Clarity in Economic Terminology Leads to "Ridiculous Debates". In politics today, but also in economics, terms such as “free market” and “trickle down” are frequently used without any consistency in meaning. This failure of a common definition leads to misunderstanding and lost information. While the ambiguity may be ideal for politicians (each individual can assume what they want to hear), economists hoping to inform policy making need to work on more rigorously defining economic terminology.

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