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:

    1. 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.
    2. 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?
    3. 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?
    4. 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

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