Investopedia explains 'Trickle Down Theory'
President Reagan's economic policies, commonly referred to as "Reaganomics" or supply-side economics, were based on trickle-down theory. The idea is that with a lower tax burden and increased investment, business can produce more, increasing employment and worker pay.
A contrasting theory, Keynesianism, is based on stimulating demand through government spending and other government interventions. Trickle-down theory does not support government intervention in the economy.
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