New Release: A Critical Review of Macroeconomic Models for Guaranteed Income & The Child Tax Credit

Press Release

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. 

The authors of the report are JFI Senior Fellow Claudia Sahm, Lead Researcher on Guaranteed Income Stephen Nuñez, and Director of Research Sidhya Balakrishnan.

Read the full press release here for key takeaways. View the full paper here, and the series here.