The Hutchins Center’s Fiscal Impact Measure: Methodology by Louise Sheiner, Sage Belz, Sophia Campbell, and Manuel Alcalá Kovalski published by The Brookings (12/2021).
“The Hutchins Center on Fiscal and Monetary Policy’s Fiscal Impact Measure (FIM) is a gauge of the contribution of federal, state, and local fiscal policy to near-term changes in the gross domestic product, the tally of all the goods and services produced in the economy. When the FIM is positive, the government is boosting the growth of real Gross Domestic Product (GDP), and when it is negative, it is restraining it.
The FIM includes both the direct effects of government purchases as well as the more indirect effects of government taxes and government transfers. The FIM is closely related to a measure of fiscal stance developed by Federal Reserve Board staff (see Cashin et al. 2017). The FIM captures the effects on the economy of changes in policy, trend growth in spending, and the automatic stabilizers…”
