New Release: A Critical Review of Macroeconomic Models for Guaranteed Income & The Child Tax Credit
New York, NY, October 27, 2021 — A new report from the Jain Family Institute shares the lessons from six macroeconomic modeling analyses of the possible effects of a federal guaranteed income policy on the U.S. economy. The report also applies the studies’ findings to the current Child Tax Credit.
“Model Behavior: A Critical Review of Macroeconomic Models for Guaranteed Income & the Child Tax Credit,” is the third in a white paper series providing in-depth, objective analysis of pathways to a guaranteed income in the U.S. This report examines the predictions from cutting-edge macroeconomic models on the long-term, economy-wide effects of regular cash transfer policy. The macroeconomic studies, which consider national programs, fill a research gap in microeconomic studies on local or state cash programs due to their limited scale. Using the current Child Tax Credit (CTC) as a case study, the JFI report shows that considerable disagreements exist among macroeconomists about the effects on labor markets, business investment, educational attainment, and GDP. Even so, the macroeconomic models are a useful addition to the current policy debates, particularly for identifying unintended consequences and the need for other supporting policies to mitigate them.