In policy debates, we often hear about "trickle-down economics," but there's not even a colloquial term for the opposite flow—wealth moving up the income distribution. I usually say "bubble-up," but more importantly, I'm trying to understand if economics has formal terminology for either of these directional flows.
These flows clearly exist regardless of one's policy views:
"Trickle-down": Income/benefits flowing from high-income earners to lower-income groups (via consumption spending, wages paid, transfers, etc.)
"Bubble-up": Income/wealth accruing to high-income earners that originates from the economic activity of the broader population (via profits, capital gains, returns on assets, etc.)
When wealth concentration increases (ΔW_top > 0), this mathematically implies bubble-up exceeds trickle-down over that period. These are real flows, not just political rhetoric.
My questions:
- Does economics have standard terminology for these directional flows? I'm not asking about "supply-side economics" (a policy package) or "redistribution" (specifically government transfers). I mean the actual income/wealth flows moving up and down the income distribution from all sources—market activity, consumption patterns, capital returns, etc.
- If formal terminology doesn't exist, why not? We have colloquial language for the downward flow ("trickle-down") but not even that for the upward flow. Do economists avoid directional metaphors as unscientific? If so, why? Or do existing frameworks (sectoral balances, distribution decomposition) make this language unnecessary?
- How would you formally define these flows?
- Trickle-down: Σ(income to bottom Y% generated by top X% economic activity)
- Bubble-up: Σ(income to top X% generated by bottom Y% economic activity)
- Or is this the wrong conceptualization?
- What framework do economists use when analyzing these dynamics? Input-output analysis? Functional income distribution? Factor income shares? Do they analyze them?
Context: I'm writing about tax policy and finding it remarkably difficult to discuss these flows precisely. "Wealth is concentrating at the top" describes the outcome, but I need clear language for the flows that produce it. Political shorthand like "trickle-down" is imprecise, but purely technical language (top decile income share dynamics) doesn't capture the directional movement that's actually happening.
Is "bubble-up" reasonable as colloquial shorthand for the upward flow? And what would economists call these if forced to name them?
What's the proper economic terminology for "trickle-down" and "bubble-up" wealth flows?
byu/bobwyman inAskEconomics
Posted by bobwyman