Doesn't reduce inflation
Nice name...kind of misleading.
Estimated Inflationary Effects
PWBM previously provided estimates of the
Build Back Better Act (H.R. 5376) on inflation. Estimating the impact of the current Inflation Reduction Act on inflation is challenged by the smaller size of the program’s spending and taxes relative to the overall U.S. economy. For these estimates, PWBM uses an “impulse response” model that is standard in economics and subject to its own model limitations. We measure inflation as the Personal Consumption Expenditures (PCE) price index.
We estimate that the Inflation Reduction Act will produce a very small increase in inflation for the first few years, up to 0.05 percent points in 2024. We estimate a 0.25 percentage point fall in the PCE price index by the late 2020s. These point estimates, however, are not statistically different than zero, thereby indicating a very low level of confidence that the legislation will have any impact on inflation.
PWBM estimates that the Inflation Reduction Act would reduce non-interest cumulative deficits by $248 billion over the budget window with no impact on GDP in 2031. The impact on inflation is statistically indistinguishable from zero. An illustrative scenario is also presented where Affordable Care A
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