Mar 14, 2020
Modeling the Macroeconomic Effects of a Universal Basic Income
Posted by Brent Ellman in category: economics
How would a massive federal spending program like a universal basic income (UBI) affect the macroeconomy? We use the Levy Institute macroeconometric model to estimate the impact of three versions of such an unconditional cash assistance program over an eight-year time horizon. Overall, we find that the economy can not only withstand large increases in federal spending, but could also grow thanks to the stimulative effects of cash transfers on the economy.