Summary: PWBM estimates that the CARES Act increases GDP by about 5 percent in 2020 while lowering GDP by 0.2 percent in 2030.

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Analysis of Estimate

Figure 1. GDP Under Simulated Recession Scenarios with and without the CARES Act

Percent Deviation from Potential Output

Table 1. Economic Effects of the CARES Act

Percent Change from Economy without CARES Act

"V Shape" Recession
"U Shape" Recession

"V Shape" Recession
Year	GDP	Capital stock	Average Hourly Wage	Hours Worked	Debt
2025	-0.2%	-0.5%	-0.2%	0.0%	7.5%
2030	-0.2%	-0.6%	-0.2%	0.0%	7.5%

"U Shape" Recession
Year	GDP	Capital stock	Average Hourly Wage	Hours Worked	Debt
2025	-0.2%	-0.5%	-0.2%	0.0%	6.7%
2030	-0.2%	-0.6%	-0.2%	0.0%	6.7%

  Year,"V Shape" Recession_No CARES Act,"V Shape" Recession_CARES Act,"U Shape" Recession_No CARES Act,"U Shape" Recession_CARES Act
  2019,0.148331094,0.125640013,0.290922238,0.274807218
  2020,-13.37737714,-8.957366347,-14.40227234,-9.99168868
  2021,-0.45810315,-0.603075772,-13.24820192,-12.84817013
  2022,-0.441255775,-0.69186158,-7.339297477,-7.56713683
  2023,-0.425653546,-0.667408337,-1.088051359,-1.313403361
  2024,-0.418816236,-0.632117355,-1.056045171,-1.252553423
  2025,-0.415436517,-0.634643671,-1.038346175,-1.242060674
  2026,-0.414377095,-0.641704381,-1.038255184,-1.252705285
  2027,-0.386866361,-0.612745154,-0.972048731,-1.181183952
  2028,-0.377442069,-0.612417688,-0.961812102,-1.179835831
  2029,-0.367004915,-0.602311231,-0.930871908,-1.152549743
  2030,-0.357553419,-0.599785255,-0.906758634,-1.131058551

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