Modeling the Macroeconomic Effects of a Universal Basic Income

By Michalis Nikiforos, Marshall Steinbaum, Gennaro Zezza |

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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.

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Marshall Steinbaum is a Fellow and Research Director at the Roosevelt Institute, where he researches market power and inequality. He works on tax policy, antitrust and competition policy, and the labor market, in particular declining entrepreneurship and labor mobility as well as credentialization and its result: the student debt crisis. He is a co-editor of After Piketty: The Agenda for Economics and Inequality (Harvard University Press 2017), and his work has appeared in Democracy, Boston Review, New Republic, American Prospect, Industrial and Labor Relations Review, and ProMarket. He has a Ph.D. in economics from the University of Chicago.