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Using Fuzzy Logic to Evaluate and Compare State Financial Condition During and after the Great Recession of 2008: Fuzzy Rule-Based Systems

YU SHI
PAQ, Vol. 44 No. 3, 394-432 (2020)
https://doi.org/10.37808/paq.44.3.3

This paper incorporates ten measures consisting of four financial condition dimensions in cash, budget, long-run, and service-level solvencies into the application of an evaluation approach-a Fuzzy Rule Based System (FRBS)-to the evaluation of U.S. state governments’ overall financial condition during and after the Great Recession of 2008. It introduces a methodology for combining the disparate measures of the system into an overall evaluation of financial condition for state governments. We identify that ten states are in good financial condition, while the majority are in a financial condition that falls somewhere between fair and poor. The evaluation results indicate that some states can do at least a fair job in financial performance; however, there is substantial room for improvement in future financial performance.

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