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De-constructing the Laffer Curve and Trickle-down Economics

Graham Watson

15th June 2019

Here is a great opinion piece from Morris Pearl in the Guardian on trickle-down economics, echoing J.K.Galbraith's view that the very notion is flawed. His analogy was that trickle-down economics was akin to giving a horse more oats in the hope that you would increase the amount of food consumed by the birds that surround it.

However, it's a nice recap of the Laffer curve and the fact that for all it's theoretical appeal, there's very little evidence that it has even been verified empirically. And even if it has, you could make a case that the distributional consequences have offset any gains.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.

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