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PROGNOSTICATORS page 53

- 12 MONTH
CERTIFICATE

5. 75%

5270

INTEREST RATE

A.P.Y./*

60 MONTH
CERTIFICATE

6.00%
6 • 1 3

Mordechai Kreinin:
Five-year expansion. -

INTEREST RATE

0 /0

A.P.Y./*

These are fixed rate certificates of deposit that are insured by Federal Deposit
Insurance Corporation (FDIC). A minimum opening deposit and balance of $500.00
is required to obtain the stated Annual Percentage Yield.

FeAGSTIM'

EQUAL HOUSING
OPPORTUNITY

LENDER

BANK
CALL (810)338-7700 or (810)352-7700

Main Office 2600 Telegraph Rd. Bloomfield Hills, MI 48302

.,..*** Feder:11y I nsured *

toss....
,47-,
* --. . •
*

-V •

•

*

*Annual percentage yield when compounded quarterly. Rate is accurate as of 1/17/97. Penalty for early withdrawal from certificate accounts may be assessed.

BARBARA ANN

In Partnership With
The Detroit Medical Center
Wayne State University
Michigan Cancer Foundation

KAR1MANOS

CANCER INSTITUTE

Cancer Prevention Tips

• Eat foods high in fiber and
low in fat

• Don't smoke or use tobacco in
any form

• Include fresh fruits, vegetables
and whole grain cereals in your
diet

• Avoid unnecessary X-rays

• If you drink alcoholic beverages,
do so only in moderation

*
*

*

"What that econometric mod-
el thrives on, what drives that
econometric model, is putting the
latest information into it. So the
econometric model has an equa-
tion, or several equations, which
relate the consumer buying of
cars, or household equipment, or
food, or clothing and shoes, to
various factors like consumer in-
comes, and the interest rates,
and the price of clothing and
shoes, or the price of automo-
biles, and so on.
"And when you take the latest
information about purchases,
and consumer incomes, and in-
terest rates and prices, and put
that into the equations, then you
can drive the equations to go
ahead from recent information
to projections of future informa-
tion, which is what we call the
forecast."
Certainly this must have been
a formidable task in the time be-
fore computers. And indeed, Dr.
Hymans started his work (he's
been at U-M since 1964) when
computers were "sufficiently em-
bryonic so that we were solving
the model one equation at a time,
very laboriously feeding infor-
mation into a fancy calculator.
"Now we solve it on a desktop
computer system that has more
power than mainframes had 10
years ago."
Dr. Hymans, who has been di-

rector of the RSQE since 1981,
works with a staff of six senior
professionals, as well as research
assistants.
Yet with all the emphasis on
modern technology, whatever
happened to business cycles?
Has that theory pretty much
gone out the window?
Dr. Hymans shakes his head.
"If you bet on that, you're going
to lose your shirt.
"Business cycles aren't gone.
They're somewhat different than
they used to be. For many years,
for most of the modern capital-
ist era, there were fundamen-
tally two kinds of business cycles:
A big business cycle, which pro-
duced at the end of its expansion
phase a very serious recession;
or a shorter business cycle,
which produced a mild recession
that ended quickly.
"The mild recessions were of-
ten policy induced. The Federal
Reserve might get nervous about
how much inflation there was,

Allen Goodman:
We're tied to automobiles.

and would tighten the economy
quickly to choke it off, and that
would produce an economic re-
cession. And then the Fed would
say, 'OK, loosen up a bit,' and
you went off again."
Sometimes, explains Dr. Hy-
mans, a mild recession can be
caused by something which orig-
inated from outside the econo-

Interest Rates

• Avoid too much sunlight; use
sunscreens

• Take estrogens only as long
as necessary

I:

Cony. Mortgage
— 30-Yr. T-Bond
+ 3-Month T-Bill

Call For More Information:

(800) KARMANOS

(527-6266)

I

I

4 1 2 3
95
1 94 1

RSQE: December 1996