CBO Fellows' Work

Renee Fox, M.D., is an Associate Professor in the Division of Neonatology of the Department of Pediatrics at the University of Maryland School of Medicine and, from 2007 to 2010, a Robert Wood Johnson Health Policy Fellow. While at CBO, Dr. Fox provided a clinical perspective and guidance on several projects and cost analyses. Working with several different staff members, she helped to examine the potential effectiveness of screening and preventive services in Medicare and evidence on the outcomes of alternative strategies for coordinating care in that program. Dr. Fox was also the lead analyst in preparing a draft report on childhood obesity. That analysis documented the dramatic rise in the prevalence of obesity among children, as well as its causes and short- and long-term consequences. The report also outlined potential changes in lifestyle and other nonmedical ways to reduce or prevent obesity among children.

Menzie Chinn is a professor at the Robert M. LaFollette School of Public Affairs and the Department of Economics at the University of Wisconsin at Madison. Previously, he taught at the University of California at Santa Cruz, was on the staff of the President's Council of Economic Advisers, and was a visiting scholar at the International Monetary Fund and the Federal Reserve Board. His research examines the empirical and policy aspects of macroeconomic interactions between countries. While at CBO, Professor Chinn reviewed analysts' work on the trade deficit, recent shifts in the financing of the U.S. current account, interest rate spreads, energy markets, and agricultural trade barriers and the Doha round of trade negotiations. He also studied the recent behavior of exports and imports.

Shou Eric Wang has served as a faculty member of the economics departments at Cornell and Princeton universities, and he has several years of experience at the Federal Reserve Bank of New York. At CBO, Dr. Wang worked in the Microeconomic and Financial Studies Division using option-pricing models to estimate the value of risk-adjusted subsidies for guaranteed loans to individuals and of contingent liabilities of the Pension Benefit Guarantee Corporation, in addition to offering his expertise on other projects.

Ernest (Ernie) Goss visited CBO for six months, working primarily with CBO's Macroeconomic Analysis Division. During that time, he carried out research on the potential impact of work-related Internet usage on productivity and wages in the United States. He also reviewed papers prepared by CBO staff, provided comments on current economic developments, and contributed to CBO's research seminars. Since leaving CBO, Dr. Goss has continued his monthly survey of 1,800 businesses in 12 Midwestern and Rocky Mountain states. He continues to publish in academic journals and will release his second book, which examines the economics of the gambling industry, in 2005.

A "big picture" thinker with a background in academia, Professor Johnson provided CBO with an alternative way to look at revenues. In general, CBO's economic forecasts compare favorably with those of other forecasters--such as the Administration and the Blue Chip consensus--but its revenue estimates often miss the mark. Because those forecasts are essential to the budgetary process, CBO continuously looks for ways to improve its revenue models and forecasting methods.

As part of that effort, CBO brought in Professor Johnson to build a model for estimating revenues. His Revenue Estimation System is based on an econometric model that uses high-frequency (monthly) Treasury data and incorporates a quarterly macroeconomic forecast. Revenue projections run on the basis of Professor Johnson's model are similar so far to those based on CBO's current model, which uses annual data. That similarity shows that the underlying data are stable and reinforces the validity of CBO's projections.

Professor Johnson also reviewed the theoretical consistency of CBO's long-term policy simulation model, which was developed to answer budgetary and distributional questions about Social Security, Medicare, and other long-term issues.

A clinician with a policy focus to her work, Dr. Barnato brought an important combination of skills to CBO's health-related projects.

In her principal project, Barnato, along with CBO colleagues and an intern from Yale, looked at a long-standing question about Medicare costs: why a small proportion of Medicare beneficiaries account for the majority of the program's spending in any given year. Medicare's elderly and disabled enrollees account for one-sixth of the U.S. population but one-third of total health care costs. Despite policies aimed at encouraging enrollment in capitated risk plans, the vast majority of Medicare beneficiaries remain in the fee-for-service sector. Consequently, improving the efficiency of health care delivery in that sector, particularly for high-cost patients, is a priority for the program.

To expand the current understanding of those beneficiaries (as a prelude to developing and evaluating strategies for managing high-cost patients), Dr. Barnato and CBO colleagues used Medicare claims from a sample of beneficiaries to describe high-cost patients' characteristics, investigate health care costs over time, and explore ways to identify patients who will incur high costs in the future.

Dr. Barnato also helped review the literature on the economic outcomes of disease management programs to enhance their understanding of the relevant issues.

Applying her academic expertise to real-world issues, Professor Deborah Lucas is helping CBO work smarter. Currently serving part-time as CBO's Senior Economic Consultant, she has been with the agency since 2000, helping to direct its research agenda and reviewing many of its projects and reports.

While a visiting scholar, Professor Lucas contributed to several significant CBO studies. She coauthored a controversial report on the federal subsidy implicit in the government's support of Fannie Mae and Freddie Mac, Federal Subsidies and the Housing GSEs. Another paper she helped write discusses the economic and budgetary implications of federal investments in privates securities, Evaluating and Accounting for Federal Investment in Corporate Stocks and Other Private Securities.

Professor Lucas has also helped develop CBO's long-term policy simulation model, which looks at the effects of fiscal policy on the federal budget over the next 75 years. In particular, the model analyzes the impact of Social Security, Medicare, and Medicaid on the economy over the long term, an issue that will rise to the top of the nation's agenda as the baby-boom generation ages.

Preston Miller visited CBO for 18 months from the fall of 1999 through the spring of 2001. During that time, he participated in the preparation of CBO's macroeconomic forecasts, reviewed papers from all areas of work at CBO, helped guide new projects as part of senior management's research planning group, and helped revise CBO's procedure for forecasting capital gains.

As an input to its estimates of federal revenues, CBO requires an estimate of capital gains realizations in the current calendar year and forecasts of realizations for the next 10 years. Those predictions are difficult to make with a high degree of accuracy because taxpayers' decisions to sell assets are complex and the information on those sales is largely indirect. Dr. Miller and a colleague at CBO improved the equations used for estimating gains in the current year. His experience with macroeconomics helped rationalize the variables used, and his knowledge of time-series analysis improved the equation-testing procedure.

Since leaving CBO, Dr. Miller has continued to work with the agency to improve forecasts of gains beyond those realized in the current year. Along with Jan Kim, a post-doctoral economist at the Minneapolis Federal Reserve Bank, Dr. Miller has developed models of the economy specifically for that task. A paper describing the estimating equation work is available; see Forecasting Capital Gains Realizations (CBO Technical Paper No. 2000-5, August 2000).