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

Author

Listed:
  • 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.

Suggested Citation

  • Yuexing Lan & Charles Hegji, 2009. "A new look at the trickle-down effect in the united states economy," Economics Bulletin, AccessEcon, vol. 29(3), pages 1743-1748.
    • Handle: RePEc:ebl:ecbull:eb-08i30027
    as

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    References listed on IDEAS

    as
    1. Arndt, H W, 1983. "The "Trickle-Down" Myth," Economic Development and Cultural Change, University of Chicago Press, vol. 32(1), pages 1-10, October.
    2. 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.
    3. Kiminori Matsuyama, 2000. "Endogenous Inequality," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(4), pages 743-759.
    4. Philippe Aghion & Patrick Bolton, 1997. "A Theory of Trickle-Down Growth and Development," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(2), pages 151-172.
    5. 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.
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    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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