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offices of the Forecast occupy a quiet corner of Leon and Toby
Gold Hall in UCLA's Anderson School. The cramped quarters feel somewhat
isolated from the rest of the school's busy surroundings, and if
one didn't know better it would be easy to assume that there wasn't
much going on here. But looks are deceiving. Using the combination
of professional expertise and the latest computer-based econometric
models, the tiny staff of five churns out four major forecasts a
year, reports that help illuminate the underpinnings of the local,
state, national and global economies. It is the oldest major forecasting
group in the West and is included in the Blue Chip Economic Indicators
survey, one of the top consensus forecasts in the country.
is not to say that the Forecast's predications are uniformly embraced.
When it predicted recession in 2001, for example, "we were accused
of being pessimistic because we called the recession early," Leamer
the terrorist attacks of September 11.
the assaults on New York and Washington, D.C., other economists
who didn't before see a recession in the offing suddenly were saying
that the recession was here, and it was being caused by the terrorists.
The Anderson forecasters, however, were not so quick to rush to
that judgment. "Our response was to say, 'Let's be more thoughtful
here and think about whether this was really going to be a recession-causing
says. "My view was that [those predicting recession in the wake
of the attacks] were giving the terrorists way too much credit."
Leamer's view is shared by Washington Post economics writer Steven
Pearlstein. "I noted last year, when I was thinking that the economy
was in much worse shape than other people thought, that Ed had been
issuing some warnings," Pearlstein says. "So I called him up and
was impressed with the way he thought about the economy. Because
he thinks about it differently."