Betting on the Future with a Cloudy Crystal Ball? How Financial Theory Can Improve Revenue Forecasting and Budgets in the States

Accurately predicting revenue growth is nearly impossible. Predicting the peaks and valleys of the business cycle is even more hopeless. This matters because tax revenues are largely driven by economic growth. Volatile, unpredictable revenue growth causes all sorts of unpleasant responses on the part of governments, most commonly manic-depressive patterns of spending and taxing. Fortunately, modern financial economics gives us a set of tools that can be used to manage volatility. This article shows how such tools can be used to inform fiscal decision making. The focus here is state governments, but the analysis applies to all jurisdictions that face hard budget constraints and therefore must balance spending increases against revenue growth.     

Measuring media oriented terrorism

Although long established, media oriented terrorist events have not been conceptualized or measured in a coherent manner. To forward the empirical study of media oriented terrorism, a measure that can be applied to terrorist events or to terrorist groups was developed and employed to compare terrorist activity for twenty terrorist groups and two hundred terrorist events. The media orientation measure taps into five factors of media orientation and successfully differentiates high from low media orientated events and active and inactive media oriented terrorist groups. The single most important factor regarding any group's individual media orientation level was their base of operation. Terrorist groups that were engaged in regional struggles were found to be less media oriented. Despite the news value of death and injury, the terrorist group with the highest fatality and injury averages ranked ninth in its media orientation score indicating that death and injury was not a necessary indicator of media orientation. Scores further suggest that media savvy well-known terrorist groups did not pursue media oriented activity as a constant strategy.     

A calculation of the theoretical significance of matched bullets

Abstract:  The comparison and identification of bullets from the striations that appear on their surfaces, after they have been fired from a gun, have been practiced since the 1920s. Although the significance of the correspondences of these impression marks has been empirically justified, there is a conspicuous absence of any theoretical foundation for the likelihood. What is presented here is the derivation of the formulae for calculating the probability for the correspondence of the impression marks on a subject bullet to a random distribution of a similar number of impression marks on a suspect bullet of the same type. The approach to the calculation entails subdividing the impression marks into a series of individual lines having widths equal to the separation distance at which a misalignment of striations between the two bullets cannot be distinguished. This distance depends upon the resolution limit imposed by the microscope as well as by the visual acuity of the examiner. A calculation of the probabilities for finding pairs and triplets of consecutively matching lines on nonmatching bullets, by an examiner with normal perception using a microscope at 40× magnification, produces values that agree well with the empirical probabilities determined by Biasotti in the 1950s and when determined for larger consecutive sequences suggest that they are extremely unlikely to occur. The formulae can be used to determine the probabilities for the random occurrence of any sequence of striae and provide a straightforward way to quantitatively justify the significance of a specific match between any two bullets.     

Political liberty and social development: An empirical investigation

Liberty is not only economic; it is political. Whether the economic system promotes social development is one question. Whether the political system promotes social development is another question. The empirical investigations indicate that for the world political liberty has a small, though significant relationship with the level of social development.By investigating groupings of alternative economic systems, it is clear that global policies to increase political liberty will not necessarily bring about desired results. In the Socialist, Mixed Socialist, and Capitalist-Statist countries political liberty appears to have virtually no relationship with social development. An increase in political liberty without an increase in economic liberty is even associated with lower levels of social development.