Benjamin W. Powell is research fellow at the Independent Institute and assistant professor of economics at Suff olk University. He is author of more than two dozen scholarly articles and editor of the book, Making Poor Nations Rich: Entrepreneurship and the Process of Development.
Randall G. Holcombe is research fellow at the Independent Institute and DeVoe Moore Professor of Economics at Florida State University. He is author of twelve books and more than 100 articles published in academic and professional journals. His books include Writing Off Ideas: Taxation, Foundations, and Philanthropy in America, Public Policy and the Quality of Life, From Liberty to Democracy: Th e Transformation of American Government, and Entrepreneurship and Economic Progress.
The book presents an improved methodology for measuring cyclical variability of revenues and uses this methodology to show that there is no way to restructure state tax systems in order to appreciably reduce the fiscal stress associated with recessions. Fiscal stress can be lessened by setting aside revenues during prosperous years in a rainy day fund, but current rainy day funds are not large enough to eliminate the fiscal stress caused by recessions.