Methods for Analyzing the Economic Effects of Fiscal Policy Changes

CBO will release a report updating its 10-year budget baseline on May 12, and an analysis of the President’s 2024 discretionary proposals on May 18. Also in May, CBO will release an updated report on federal debt and the statutory limit.

CBO's small-scale policy model determines in one model the short-run demand-driven responses and long-run supply-driven responses to policy changes. It also makes short- and long-run responses depend on the fiscal policy under study.

In certain reports and for some major pieces of legislation, CBO analyzes the short- and longer-term effects on the overall economy of changes in federal tax and spending policies. This report explains the methods that CBO uses.