[ABFM] Longterm state budget forecasts

[G. Frederick Thompson]

Once we start talking about coping with the future and looking beyond the literature
concerned with state/local finance, two books are really worthwhile, IMNHO:

Fiscal Sustainability in Theory and Practice: A Handbook, edited by Craig Burnside
(World Bank, 2005). <http://www.duke.edu/~acb8/fsb.htm>

Principles of Budgetary and Financial Policy, by Willem H. Buiter (MIT Press, 1990).
<http://www.amazon.com/gp/product/0262023032>

These two books ought to be part of every budgeter's canon.
-- 
Fred Thompson
Director, Center for Governance and
    Public Policy Research
Grace and Elmer Goudy Professor of
     Public Management and Policy
Atkinson Graduate School of Management,
Willamette University,
900 State Street, Salem OR 97301 USA
http://www.willamette.edu/~fthompso/

http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=249171

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On Thu, March 13, 2008 10:32 am, James D. Savage wrote:
> There is an interesting new study on forecasting titled "Fiscal
> Forecasting:  Lessons for the Literature and Challenges."
> European Central Bank Working Paper 843, Dec. 2007.
> <http://www.ecb.int/pub/pdf/scpwps/ecbwp843.pdf>
>
> Jim Savage
> Professor of Politics
> University of Virginia
>
> --On Thursday, March 13, 2008 11:07 AM -0400 "Mikesell, John L."
> <mikesell at indiana.edu> wrote:
>
>> Long term state budget forecasts were the rage some twenty-plus years
>> ago.  I bet every state did at least one.  I think then people realized
>> that the models were making some assumptions about specification
>> stability that weren't particularly supportable by any evidence.  And
>> they made assumptions about expenditure decisionmaking that just wasn't
>> right -- legislatures make appropriations annually, they don't spend
>> according to the econometric model or by formula.  When those realities
>> hit, we moved back to much simpler approaches -- like those of the CBO.
>> We know they aren't right but they don't confuse us with delusions of
>> precision and accuracy.  The further into the future you want your model
>> to "forecast," the simpler its structure should be.
>>
>> John Mikesell
>> Professor of Public Finance and Policy Analysis
>> Indiana University