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Growth, Inequality and Negative Trickle Down


  • Daphne Greenwood
  • Richard Holt


Neoliberal theory rationalizes inequality as both 1) necessary for growth and 2) offset by a trickle down to lower income groups. However, benefits from income growth failed to reach most of the population for the last several decades in the United States. Instead, a negative trickle down has lowered many people's wellbeing. The first aspect of negative trickle down is a new form of Veblen's conspicuous consumption with positional goods. The second is the effect on the provision of public goods. The third is the competition for limited resources, such as housing. We review how greater income inequality contributes to each.

Suggested Citation

  • Daphne Greenwood & Richard Holt, 2010. "Growth, Inequality and Negative Trickle Down," Journal of Economic Issues, Taylor & Francis Journals, vol. 44(2), pages 403-410.
  • Handle: RePEc:mes:jeciss:v:44:y:2010:i:2:p:403-410 DOI: 10.2753/JEI0021-3624440212

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    References listed on IDEAS

    1. Moritz Cruz & Edmund Amann & Bernard Walters, 2006. "Expectations, the business cycle and the Mexican peso crisis," Cambridge Journal of Economics, Oxford University Press, vol. 30(5), pages 701-722, September.
    2. repec:mes:jeciss:v:32:y:1998:i:2:p:351-363 is not listed on IDEAS
    3. Chwieroth, Jeffrey, 2007. "Neoliberal Economists and Capital Account Liberalization in Emerging Markets," International Organization, Cambridge University Press, vol. 61(02), pages 443-463, April.
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    Cited by:

    1. Ari-Veikko Anttiroiko, 2016. "City-as-a-Platform: The Rise of Participatory Innovation Platforms in Finnish Cities," Sustainability, MDPI, Open Access Journal, vol. 8(9), pages 1-31, September.

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