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Winter 2001
DOLLARS AND SENSE
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During his first few years as director, Kimbell worked to get the Forecast online, an ambitious task at a time when people were still using large, mainframe computers. In 1978, he acquired a personal computer and began to wean the staff away from depending on Data Resources Incorporated, a mainframe system that furnished time-shared access to specialized databases on California and the United States. As a result, the Forecast staff was able to make its U.S. forecast available online in the late '70s and was downloading stock market data in the mid-'80s.

"We were certainly ahead of our time in California," says Kimbell, who won the Sterling Prize in 1988 for the most accurate forecast of the U.S. economy. "In some sense, what you see now as routine was nothing new to us 20 years ago. We were very advanced in terms of the technology of forecasting, and I think that's been very important."

Ted Gibson, chief economist for the California Department of Finance, says he started attending the Anderson Forecast's conferences during Kimbell's early days as director. "Here in Sacramento, the Forecast has a very unique position, not only for us but also for our counterparts in the Legislative Analyst's Office," Gibson says. "It's very well-respected in the Legislature and by the governor because it's sort of a disinterested third party. Often, when we present a forecast, the first question we're asked is, ‘What does UCLA say?' "

In 1990, Kimbell took a two-year leave of absence to become director of macroeconometric forecasting for the WEFA Group in Pennsylvania. Taking his place as director of the BFP was young David Hensley M.A. '84, Ph.D. '89, who had been serving as director of California forecasting since 1987. Hensley clearly recalls the awkwardness of being in a position usually reserved for faculty members.

"My situation was frankly quite tenuous, and I was actually made acting director," he says. "I don't think it was entirely obvious what they were going to do with the forecast when Larry left, or whether I would be in that position for very long."

Hensley's opinion is that some people had problems with the nature of the forecast activity itself; that they viewed the BFP's research as applied, not academic. "I suspect that people looked at us and wondered why, exactly, is the university doing this? And if it's that successful, maybe it should be done outside of the university," Hensley says.

But any fears the administration had were eased when Hensley and his staff attracted attention for accurately predicting the recession of the early '90s. The Forecast maintained that California was a costly place to do business for several reasons: It was highly regulated, housing was too expensive for most people and there was slow migration into the state. Then when the recession actually occurred, the Forecast took a stronger position on the aerospace and defense downturn than anybody else.

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