Word: dri
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Dates: during 1970-1979
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Researchers at the bureau have access to a larger data base and a small databank service from Data Resources Institute (DRI), a publicly-held forecasting firm where Eckstein works half time for half pay. DRI provides the services free as a professional courtesy to economists solving large systems of complicated equations or developing simulation models...
...Carter's surprise announcement, Otto Eckstein, head of Data Resources Inc., a computerized forecasting firm, was still not ready to forecast a downturn. His current view: "We now predict recession. At these [interest] rates you are going to drive down housing and construction." Specifically, Eckstein's DRI estimates that there is a 55% chance of recession. Milton Friedman, guru of the conservative monetarist school of economists, gloomily asserts, "We have gone beyond the point of restoring the economy without a recession...
With fees from these prophecies, personal consulting and other services, DRI's revenues rose 35% last year, to just over $17 million, and profits climbed 70%, to $1,502,000; they are growing somewhat faster this year. That has made Eckstein, at 50, probably the richest American economist. Since DRI went public last November, the shares have bucked the bear market and risen from $11.50 to $18 bid, giving Eckstein and his family a stake of more than $4 million...
Eckstein sold his idea to Wall Street's Donald Marron, chief executive of Mitchell, Hutchins, the investment advisory firm.* In 1969 it raised $1.1 million in seed money and became a founding partner in the company. DRI was not the first firm to market econometric forecasts; Lawrence Klein, who developed an econometric model of the U.S. economy shortly after World War II, has been selling forecasts from his famous Wharton School model for five years longer. But Eckstein's marketing flair and his computer time-sharing innovation have made DRI by far the biggest in the field...
...great increase in the number of heads of families aged 25 to 44 who earn more than $25,000, and this will lead to a surge in sales of houses, furnishings, cars and other fairly costly goods. A happy forecast - and it is even safer to anticipate that DRI will continue to grow faster than most of the indicators that it monitors...