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A new look at the trickle-down effect in the united states economy

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  • Yuexing Lan

    ()
    (Auburn University Montgomery)

  • Charles Hegji

    ()
    (Auburn University Montgomery)

Abstract

This paper is a further investigation of the trickle-down theory. In addition to using more recent data, we use a methodology that examines some questions not previously addressed in the literature. The results suggest that an increase in wage leads to a more equal income distribution. The findings also indicate that there is no ¡°trickle-down¡± from proprietors¡¯ income and corporate profits to lower income group.

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File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I3-P22.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 29 (2009)
Issue (Month): 3 ()
Pages: 1743-1748

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Handle: RePEc:ebl:ecbull:eb-08i30027

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  1. Matsuyama, Kiminori, 2000. "Endogenous Inequality," Review of Economic Studies, Wiley Blackwell, vol. 67(4), pages 743-59, October.
  2. Richard C. Michel, 1991. "Economic growth and income equality since the 1982 recession," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 10(2), pages 181-203.
  3. Patricia Ruggles & Charles F. Stone, 1992. "Income distribution over the business cycle: The 1980s were different," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 11(4), pages 709-715.
  4. Arndt, H W, 1983. "The "Trickle-Down" Myth," Economic Development and Cultural Change, University of Chicago Press, vol. 32(1), pages 1-10, October.
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