Eckstein Advises Area Group Of Projected Economic Surge
The nation's economy is in the midst of a period of sustained improvement, Otto Eckstein, Warburg Professor of Economics, told about 100 people attending a New England Economic Project (NEEP) conference on Friday.
Eckstein said later that the economy "got so sick last winter that the Administration had to do exactly what Professor Samuelson's textbook prescribed."
"What resulted from the tax cut was what students learn in Ec 10. The public used its new purchasing power immediately in the consumer-retail area," he said.
"The worst business cycle since the war is over," Eckstein said, noting that housing, capital, profits, wages and employment are all on the upswing.
"Even if demand doesn't go up every month, you know it's going to keep on going," Eckstein said. "Once the economy starts going up, things feed on each other," he said.
Stephen A. Marglin '59, professor of Economics, said yesterday he is unimpressed by the upturn. Seven per cent unemployment looks good only relative to 9 per cent, he said. "These aren't Harvard professors we're talking about who are out of work."
Marglin, a Marxist economist, called the improvement a sign of the "contradictions of the capitalist system." He explained that the economy cannot sustain full employment at the same time as stable prices and high profits.
"The more the economy improves on the one hand, the more problems are caused on the other," he said.
James S. Duesenberry, chairman of the Economics Department, said yesterday that Eckstein's projections "are the kind of numbers in most forecasters' ballparks."
Eckstein, founder of Data Resources Inc. (DRI), one of the nation's largest economic forecasters, is not officially associated with NEEP, a non-profit group concerned with New England economic projection.