Тузувчи : Файзуллаева Н

Step 3. In the third step, we adjust the components of GDP so that they are consistent with not only CBO’s projections of real GDP and real Federal spend­ing (on both current consumption and investment) but also current laws and policies. We follow a three-step procedure.

First, we adjust all components of GDP for which CBO’s baseline pro­jections are unavailable. Those components include personal consumption, gross private domestic investment, State and local government purchases of goods and services (including State and local investment), and net exports. We scale all four aggregates proportionately so that they are consistent with CBO’s projections of real GDP and real Federal spending. We do so using information from the control forecast about the allocation of GDP among its constituent components.

Second, we derive a target for personal consumption that is more in line with CBO’s current-law assumptions. A target for real personal consumption obtained using information strictly from the control forecast is likely to be too high. This is because the control forecast does not assume current law. CBO does not describe in detail its baseline projections of personal consumption. However, the economic outlook chapter of The Budget and Economic Outlook typically gives annual rates of growth in personal consumption for the 2 years covered by CBO’s short-term economic forecast.43 We derive a target for real personal consumption using those growth rates and some judgment about the likely impacts on personal saving of not extending EGTRRA’s and JGTRRA’s expiring provisions after 2010.

Finally, we readjust all components of GDP for which we do not have published projections from CBO. At this stage, those components include gross private domestic investment, State and local government purchases of goods and services, and net exports. We scale all three aggregates proportionally so that they are jointly consistent with CBO’s projections of real GDP and real Federal spending and our target of real personal consumption. In doing so, we again rely primarily on information from the control forecast.

Before continuing to step 4, we consider State and local government operating surpluses in our CBO-like forecast. At this point in the calibration, State and local government purchases of goods and services, when combined with all other State and local spending, could exceed State and local revenues by a wide margin (or vice versa). CBO does not typically describe in any great detail its baseline projections for State and local government budgets. However, we assume that those budgets are roughly in balance. We adjust components of State and local spending (other than purchases of goods and services) to put State and local budgets as close as possible to a slight surplus position in the final CBO-like baseline forecast.