The Budget Lab

Per @dealbook, we at @The_Budget_Lab have a "bombshell" report out on the revenue potential of closing the carried interest loophole. Here's the report: budgetlab.yale.edu/research/refin… The existence of carried interest is *WILD* -- $ fund managers get lower tax rates than wage-earners

Today we at @The_Budget_Lab just updated our blog on the Tariff Rate Tracker, our open-source tool for estimating daily effective tariff rates. budgetlab.yale.edu/research/intro…

Great to be back with @SquawkCNBC for jobs day this morning. Watch here: cnbc.com/video/2026/05/…

This new approach can and will be regularly updated as new jobs data come in, which gives us another tool in the toolkit for AI and the labor market monitoring. We use the new analysis for a Jobs Day Preview.  Read here:  budgetlab.yale.edu/research/ai-pr…

Exposed and unexposed occupations (and their workers) are quite different, making it important to account for that when making any comparisons. One interesting fact about AI-exposed occupations (vs unexposed) is that their employment varies less with the business cycle in pre-pandemic data. Our method can adjust for this and other differences.

The introduction and adoption of powerful new AI tools has many wondering if the labor market has already - or will soon - be affected in a big way. Prior Budget Lab analysis + a regularly updated tracker haven't yet found such effects. But these are early days and it's important to explore new methods for monitoring the labor market. Today the @The_Budget_Lab has a new analysis of AI effects on the labor market that does exactly this. Read full report here: budgetlab.yale.edu/research/what-…

Today's @Axios Macro @Neil_Irwin features @The_Budget_Lab's newly released interactive tool showing "What an AI productivity surge would mean for the fiscal outlook." Read the story here: axios.com/2026/05/06/ai-…

These are not the only factors that matter, and The Budget Lab will be analyzing others. But we can get a better understanding of the risks from thinking through these first-order considerations in a macro model. And users of the BLSMM interactive tool can input their own assumptions to see how they matter to macro and fiscal outcomes. budgetlab.yale.edu/research/budge…

It matters whether labor productivity growth simply rises to an historically unusual level (2.5% sustained over ten years) or an unprecedented-in-the-postwar-period level (3.2% over ten years). It also matters how much, if any, labor force participation falls. And it matters how much policymakers spend in response to such dislocation.

It is important to know what AI will mean for the economy, but quite hard to say anything with certainty. This makes it especially useful to consider multiple scenarios - something forecasters do routinely to discipline their thinking about potential risks to their forecasts.

In a separate article, we provide additional illustrative scenarios, from a fiscal sustainability crisis to a rise in defense outlays: budgetlab.yale.edu/research/how-b… You can explore these scenarios and any of your own choosing in the interactive itself. Because this is version 1.0 of a tool that we intend to refine and improve over time, feedback is very welcome. We hope you find it useful!

The tool was designed to be simple and transparent, which helps users to understand how a particular fiscal policy or change in economic assumptions is driving trends over the ten-year budget window. One important caveat is that BLSMM outputs are never Budget Lab scores or forecasts. Rather, they are illustrative scenarios that users can customize to help them think through economic and fiscal futures.

Today, @The_Budget_Lab is excited to launch a new Budget Lab Scenario Macro Model called BLSMM (pronounced “blossom”). It’s an interactive tool to help users explore how different economic and fiscal assumptions could change the budget outlook. Try the tool here: budgetlab.yale.edu/research/budge…

@NPR's @NPRKelly spoke with @marthagimbel today about living in a war economy. Listen here: npr.org/2026/05/05/nx-…

Read full report here: budgetlab.yale.edu/research/refin…

@Politico's Weekly Tax today features the new @The_Budget_Lab analysis, "Refining Revenue Estimates for Taxing Carried Interest" politico.com/newsletters/we…