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Winter 2001
DOLLARS AND SENSE
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On campus, the Forecast is more than just a group of number-crunchers working in blissful solitude at the difficult task of predicting economic trends. It supports management education through teaching, supervision of M.B.A. field-study projects and training of Ph.D. students in advanced econometric model-building and forecasting methods.

Just how all this is achieved -- so successfully and for so long -- is a remarkable story. The Forecast is virtually self-supporting, receiving most of its funding from seminar membership, consulting fees and its conferences, which have drawn speakers such as Pete Wilson, former governor of California; Kathleen Connell Ph.D. '87, California state controller; and Leon Panetta, chairman of the U.S. House Budget Committee and later White House chief of staff to President Clinton.

It has managed to survive countless ebbs and flows, much like the economy it studies so closely.

From its humble beginnings a half-century ago under Bob Williams, the Business Forecasting Project, or BFP, expanded eight years later with the presentation of its first annual public forecast conference. In 1968, the UCLA Business Forecasting Seminar was established to fund the construction of more complex econometric models and the production of quarterly conferences. Initial corporate members included Bank of America, General Telephone, the Los Angeles Times and Southern California Edison.

The Forecast staff also continued to grow. Besides Williams as director, Donald Ratajczak joined the faculty of the Graduate School of Management in 1968 and assumed responsibility for forecasting and model construction. Although he stayed just a few years, Ratajczak developed a sophisticated model of the state economy based largely on employment and personal-income data, an approach that the staff still uses today.

It wasn't until 1981 that the Forecast got its second director, Larry J. Kimbell, an economics professor who joined the staff in 1973 to take over Ratajczak's job of producing the forecast numbers. When Bob Williams retired in 1981, he handed the reins to Kimbell, who sought to accomplish two things: strengthen the Forecast's ties with major banks, aerospace firms, utilities and government entities in California, and finish Ratajczak's task of converting the Forecast from a consensus-based model to a fully computerized, econometric model.

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