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Economy

CBO regularly assesses the state of the economy and the impact on the economy of proposed changes in federal spending and taxes. Analysts prepare economic projections that underlie CBO’s projections for the federal budget and cost estimates for proposed legislation; study major aspects of the economy such as trends in productivity and long-term unemployment; and examine the economic impact of changes in the nation’s tax system or reforms to federal programs.

Sub-Topics:

  • Analysis of the President's Budget
  • Budget and Economic Outlook
  • Economic Projections
  • Economic Stimulus
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  • Long-Term Economic Trends
  • NAFTA

monthly archive

  • May 2013 (2)
  • April 2013 (14)
  • March 2013 (22)
  • February 2013 (10)
  • January 2013 (11)
  • December 2012 (4)
  • November 2012 (10)
  • October 2012 (4)
  • September 2012 (6)
  • August 2012 (5)
  • July 2012 (11)
  • June 2012 (8)
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CBO Releases Latest Quarterly Report on ARRA’s Effect on Output and Employment

blog post

November 20, 2012


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related publications


  • What Accounts for the Slow Growth of the Economy After the Recession? - Infographic

    November 14, 2012

  • An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022

    August 22, 2012
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What Accounts for the Slow Growth of the Economy After the Recession?

report

November 14, 2012

read complete document  (pdf, 387 kb)

monthly archive

  • May 2013 (2)
  • April 2013 (14)
  • March 2013 (22)
  • February 2013 (10)
  • January 2013 (11)
  • December 2012 (4)
  • November 2012 (10)
  • October 2012 (4)
  • September 2012 (6)
  • August 2012 (5)
  • July 2012 (11)
  • June 2012 (8)
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CBO Releases Report Examining the Reasons for the Slow Growth of the Economy Since the Recent Recession

blog post

November 14, 2012


related publications


  • What Accounts for the Slow Growth of the Economy After the Recession?

    November 14, 2012
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What Accounts for the Slow Growth of the Economy After the Recession? - Infographic

image

November 14, 2012

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monthly archive

  • May 2013 (2)
  • April 2013 (14)
  • March 2013 (22)
  • February 2013 (10)
  • January 2013 (11)
  • December 2012 (4)
  • November 2012 (10)
  • October 2012 (4)
  • September 2012 (6)
  • August 2012 (5)
  • July 2012 (11)
  • June 2012 (8)
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The Challenge of Deficit Reduction

blog post

November 8, 2012


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related publications


  • An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022

    August 22, 2012

  • Fiscal Tightening in 2013 and Its Economic Consequences - Infographic

    August 22, 2012

  • Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output from April 2012 Through June 2012

    August 23, 2012

  • The 2012 Long-Term Budget Outlook

    June 05, 2012

  • Assessing the Short-Term Effects on Output of Changes in Federal Fiscal Policies: Working Paper 2012-08

    May 25, 2012

  • Economic Effects of Reducing the Fiscal Restraint That Is Scheduled to Occur in 2013

    May 22, 2012

  • Policies for Increasing Economic Growth and Employment in 2012 and 2013

    November 15, 2011

  • Confronting the Nation's Fiscal Policy Challenges

    September 13, 2011

  • Reducing the Deficit: Spending and Revenue Options

    March 10, 2011
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Economic Effects of Policies Contributing to Fiscal Tightening in 2013

report

November 8, 2012

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related publications


  • Economic Effects of Policies Contributing to Fiscal Tightening in 2013

    November 08, 2012

  • How the Supply of Labor Responds to Changes in Fiscal Policy

    October 25, 2012

  • An Update to the Budget and Economic Outlook: Fiscal Years 2012 to 2022

    August 22, 2012

  • The 2012 Long-Term Budget Outlook

    June 05, 2012

  • The Budget and Economic Outlook: Fiscal Years 2012 to 2022

    January 31, 2012

  • The Macroeconomic and Budgetary Effects of an Illustrative Policy for Reducing the Federal Budget Deficit

    July 14, 2011

  • Reducing the Deficit: Spending and Revenue Options

    March 10, 2011

  • Federal Debt and the Risk of a Fiscal Crisis

    July 27, 2010
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Choices for Deficit Reduction

report

November 8, 2012

read complete document  (pdf, 541 kb)

related publications


  • How the Supply of Labor Responds to Changes in Fiscal Policy

    October 25, 2012
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Review of Estimates of the Frisch Elasticity of Labor Supply: Working Paper 2012-13

working paper

October 25, 2012

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Abstract

Felix Reichling and Charles Whalen

Among the models that CBO uses to analyze the economic effects of changes in federal fiscal policy is a life-cycle growth model. That model requires an estimate of the responsiveness of the supply of labor to a one-time temporary change in after-tax compensation, which is described by the so-called Frisch elasticity. CBO incorporates into its analyses an estimate of the Frisch elasticity that ranges from 0.27 to 0.53, with a central estimate of 0.40. This paper describes how CBO derived that range from the research literature.


related publications


  • How the Supply of Labor Responds to Changes in Fiscal Policy

    October 25, 2012
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A Review of Recent Research on Labor Supply Elasticities: Working Paper 2012-12

working paper

October 25, 2012

read complete document  (pdf, 341 kb)

Abstract

Robert McClelland and Shannon Mok

This paper updates a review conducted by CBO in 1996 in which the agency evaluated the academic research on the effects of changes in after-tax wages on labor supply in the U.S. economy. That review concluded that substitution elasticities were larger in absolute value than income elasticities and that the decision to work was more responsive to after-tax wages than was the choice of hours. In this update, we find that for men and single women, estimates of substitution elasticities have increased, and income elasticities still appear to be smaller in absolute value than substitution elasticities. We also find that labor supply elasticities of married women have fallen substantially in the last three decades, although they are still higher than the elasticities of men and unmarried women. Based on our review, the elasticities of broad measures of income (total income less capital gains) from tax return data are in most instances consistent with the labor supply elasticities estimated using survey data. We find little compelling evidence that high-income taxpayers have substantially higher elasticities with respect to their labor input than other taxpayers: While some studies have estimated higher elasticities of broad income among high-income taxpayers, those results appear to reflect those taxpayers’ greater ability to time their income. In contrast, we find evidence that low-income workers have higher elasticities of labor supply than other workers, especially in the component of their labor response that reflects movement in and out of the workforce.


monthly archive

  • May 2013 (2)
  • April 2013 (14)
  • March 2013 (22)
  • February 2013 (10)
  • January 2013 (11)
  • December 2012 (4)
  • November 2012 (10)
  • October 2012 (4)
  • September 2012 (6)
  • August 2012 (5)
  • July 2012 (11)
  • June 2012 (8)
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Presentation at the University of Michigan

blog post

September 21, 2012


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