Trickle-down theory

Trickle-down theory, also known as trickle down economics, was a term used by detractors and advocates alike for some of the policies of Ronald Reagan. See Reaganomics. It is the view that to benefit the wealthy is to benefit the middle classes and even the poor. These benefits then trickle down. This idea is central to Supply Side Economics and it was a highly politically charged issue during the Reagan Administration. Supply Side Economics was implemented, and the economy did improve. However, there is debate over what caused these improvements. Paul Volcker, the then Fed Chief, had already begun implementing far less controversial monetary policies to solve the problem of stagflation and many have said it was his monetary policies which caused the economic turn around. David Stockman, Reagan's Economic Advisor later characterized supply side economics and trickle down economics as rhetoric.

Related Topics:
Reaganomics - Supply Side Economics - Paul Volcker - Stagflation - David Stockman

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