In Memory Of Victor Zarnowitz

Victor Zarnowitz, well known US economist and expert on business cycles died last Saturday in Manhattan. He was 89. Although I didn’t know him in any way personally, I learnt a lot from reading Victor’s papers and his monumental book on the US business cycle – “Business Cycles: Theory, History, Indicators and Forecasting” (University of Chicago Press, 1992). Among other ideas of note, Zarnowitz divided the history of modern industrial society into deflationary and inflationary epochs, with the system switching around from one mode to the other for reasons we still barely understand. In his view, 1875 to 1918 would be, basically, an inflationary epoch, 1918 – 1945 a deflationary one, 1945 – 1995 an inflationary one, and 1995 to……… a disinflationary/deflationary one.

Thank you Victor, your presence among us will be missed now more than ever. Dennis Hevesi has an obituary in the New York Times.

Dr. Zarnowitz, who was emeritus professor of economics at the University of Chicago, was also a research associate for the National Bureau of Economic Research, and in that capacity was one of the seven economists who officially determine when the United States is in a recession. Speaking of the growing dependence of forecasters on computerized econometric models, he said the following in a New York Time Op-Ed in 1980:

“Their expectations ran high that in such models lay the answer to the challenges of economic forecasting and policy making…..They were to be disappointed……..Forecasts of econometric model builders have been no more accurate than the forecasts of those who analyze business conditions using less formal methods,”

Times, it seems have not changed that much. You can find a list of his NBER papers and other publications here, and his Conference Board biography here.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".