Income Inequality and Conventional Economic Theory

: How Canada can learn from Reaganomics Although the study looked at many things, one of the key areas examined was income inequality — how a country collective wealth is divided between different income groups, according to CBC. Trickle-down economics questioned Conventional economic theory in some quarters is that the best way to stimulate economic growth for everyone is to move capital to the top, where it gets invested in businesses that create jobs and tax revenues for all. That was one of the conclusions of an exhaustive study prepared for the International Monetary Fund released on Tuesday that looked at historical data from 150 developed economies around the world over the past several decades. Income inequality was a focus of the recent Occupy Wall Street protests that sought to redistribute wealth more equitably. Known as trickle-down economics, it thought by some to be a better way to expand the economy than directing wealth to lower income groups lower down, who, according to the theory, don't spend money in ways that filter through the entire economy. A staff discussion paper prepared for the IMF says boosting the shares of those with lower incomes helps the economy more than adding to the wealth of the rich. (news.financializer.com). As reported in the news.