Pre-registration
US Biden IRA + CHIPS 2022 fiscal expansion produced measurable industrial investment gains without triggering persistent wage-price spiral once supply-side pandemic disruptions resolved.
Falsification criterion — what would disprove this
This hypothesis is considered falsified if:
Primary v2 descriptive test starts at August 2022, when CHIPS and IRA were enacted. It is supported if real manufacturing construction spending is at least 25% above its August 2022 level by December 2025, while 2025-Q4 core PCE inflation is below 4.0% year-over-year and 2025-Q4 average-hourly-earnings growth is below 4.5% year-over-year. It is refuted if real manufacturing construction spending is less than 10% above August 2022 by December 2025 or if both core PCE and wage growth exceed their wage-price-spiral thresholds. Otherwise it is partial/weakened.
formal test & threshold
test: fred_mfg_construction_core_pce_wage_2022_2025 threshold: support if real mfg construction >=+25%, core PCE <4.0%, AHE wage growth <4.5%; refute if construction <+10% or both inflation and wage thresholds breach
Method
- Template
local_projections- Fixed effects
- Clustering
HAC- Sample
- 1 countries · 2018 – 2025
- Evidence type
- associational
Local projections of inflation and wage-price dynamics on identified IRA/CHIPS fiscal-impulse shocks (CBO-scored outlay paths) using monthly US time series 2020-2025. HAC standard errors. Counterfactual decomposition of supply-side normalisation.
Data
| Variable | Source | Transform |
|---|---|---|
cpi_all_items outcome | fred:CPIAUCSLtier 1 | log_yoy |
cpi_core_pce outcome | fred:PCEPILFEtier 1 | log_yoy |
average_hourly_earnings outcome | bls:CES0500000003tier 1 | log_yoy |
manufacturing_construction_spending outcome | fred:TLMFGCONStier 1 | log |
ira_chips_fiscal_impulse treatment | derived:cbo_ira_chips_outlay_pathtier 4 | level |
oil_price_brent control | imf_pcps:POILBREtier 1 | log_yoy |
federal_funds_rate control | fred:FEDFUNDStier 1 | level |
unemployment_rate control | fred:UNRATEtier 1 | level |
import_price_index control | fred:IRtier 1 | log_yoy |
● ready · ● pending · ● reconstruct-needed
Detailed result card
Result card - biden_ira_chips_fiscal_inflation_pass_through
Verdict: SUPPORTED - real manufacturing construction 42.0% from 2022-08 to 2025-12; 2025-Q4 core PCE 2.81% YoY; 2025-Q4 AHE wage growth 3.79% YoY
Predeclared Test
Support requires real manufacturing construction spending to be at least 25% above its August 2022 level by December 2025, with 2025-Q4 core PCE inflation below 4.0% YoY and 2025-Q4 private average hourly earnings growth below 4.5% YoY. Refutation triggers if real construction growth is below 10% or both inflation and wage growth breach the wage-price-spiral thresholds.
Scope Note
This is a descriptive post-enactment outcome test. It does not identify a causal IRA/CHIPS outlay shock or separate these laws from other industrial-policy, monetary-policy, and supply-chain forces.
Strongest opposing argument
Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.
Notes
Stub seeded from MMT school prediction about Biden IRA/CHIPS fiscal pass-through. v2 pins a narrow descriptive test using local FRED manufacturing-construction, core-PCE, and wage vintages. It does not identify a CBO outlay shock or causally separate IRA/CHIPS from other industrial-policy and supply-chain forces.