Hutchins Center Fiscal Impact Measure

May 31, 2024

Hutchins Center Fiscal Impact Measure Contribution of Fiscal Policy to Real GDP Growth Components of Fiscal Policy Contribution to Real GDP Growth

  • Four-quarter moving average
  • Quarterly fiscal impact
  • Federal spending on goods and services
  • State and local spending on goods and services
  • Taxes and benefit programs

Source: Hutchins Center calculations and projections using data from
Bureau of Economic Analysis (historical) and the Congressional Budget Office (projections)

Hutchins Center on Fiscal & Monetary Policy

The Hutchins Center Fiscal Impact Measure shows how much local, state, and federal tax and spending policy adds to or subtracts from overall economic growth, and provides a near-term forecast of fiscal policies’ effects on economic activity.


By Eli Asdourian, Georgia Nabors, Lorae Stojanovic, and Louise Sheiner 

Fiscal policy decreased U.S. GDP growth by less than 0.1 percentage point in the first quarter of 2024, the Hutchins Center Fiscal Impact Measure (FIM) shows. The FIM translates changes in taxes and spending at federal, state, and local levels into changes in aggregate demand, illustrating the effect of fiscal policy on real GDP growth. GDP increased at an annual rate of 1.3% in the first quarter of 2024, according to the government’s latest estimate. 

A decline in tax collections since 2022 and the increase in investment from the Inflation Reduction Act and Chips Act (which we include as negative taxes) increased the FIM by 0.7 percentage point in the first quarter. This was nearly offset by the waning effects of pandemic-era transfers and subsidies, which decreased the FIM by 0.6 percentage point. The combined effects of federal and state purchases decreased the FIM by an additional 0.2 percentage point.  

We anticipate that the negative effects of pandemic era transfers and subsidies will continue to diminish through the end of this year. This projection assumes the extension of provisions of the 2017 Tax Cuts and Jobs Act that are set to expire at the end of 2025. Given this assumption, we expect the FIM to be slightly negative through the end of our projection period in the first quarter of 2026.  

The FIM tracks the influence of fiscal policy on GDP growth rates. It measures the direct impacts of fiscal policy on demand (including both discretionary fiscal policy and automatic stabilizers) and also includes our estimates of the supply-side effects of the Inflation Reduction Act and CHIPS Act. It doesn’t include fiscal multipliers. For an analysis that includes multipliers, as well as a more detailed breakdown of the components of the FIM, read our explainer on how pandemic-era fiscal policy affects the level of GDP, which includes a comparison of actual GDP with our estimate of what GDP might have been had fiscal policy failed to respond to the pandemic.» 
For more on the FIM, see our methodology ». You can also read our Guide to the FIM ».