University Communications

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By Wendy Soderburg '82
Photography By Diana Koenigsberg

When it first started 50 years ago, the UCLA Anderson Forecast (then called the UCLA Business Forecasting Project) was a modest affair: Five or six economists got together for a roundtable discussion to present their views on different sectors of the national economy. After about an hour, other faculty members who attended the session filled out a questionnaire focusing on the key economic variables they'd just heard discussed, and the answers were tabulated, resulting in a median forecast for each area -- the gross national product, for instance.

That was in 1952, under the direction of Economics Professor Robert M. Williams M.A. '42. Today the Forecast, with Edward E. Leamer, the Chauncey J. Medberry Professor of Management, at its head, is one of the most respected yardsticks of the state's and nation's economies, a tool that is sought after and relied upon by government economists, businessmen and journalists throughout the country. Its findings -- generally announced at quarterly conferences -- are routinely reported in newspapers and magazines worldwide, from the Los Angeles Times to The Economist of London, and its senior staff members are constantly sought out for their expertise on matters ranging from the energy crisis to housing to unemployment.

The basis for that credence, perhaps, is the willingness of the forecasters in recent years to not focus solely on the numbers and, instead, to frame their projections within the context of the forces that cause the economy to sway in one direction or another.

"My view is that forecast numbers are unintelligible and meaningless," Leamer says. "What you've got to do is show a picture that communicates the main message, and then you must tell the story as well. Don't come here for the 'what' of the forecast, which is the numbers. Come here for the 'why.' I'm going to tell you why I think this; if you listen to me, and if you agree, you're going to understand my message."

Leamer admits that this approach was, at first, upsetting to several regular conference attendees, who had come to expect more of an emphasis on the numerical forecasts. The numbers are still provided, of course, but Leamer is more concerned about giving his listeners insight.

"The numbers are not important; the issues are," agrees Donald H. Straszheim, vice chairman of the Milken Institute, an economic think tank in Santa Monica, Calif. "What's important is for people to systematically think about what they believe has changed, how behavior is going to change among individuals from corporations, among governments, among international players. This seems to be the direction in which Ed is taking the whole endeavor, and I wholly support that."

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