Page 6-Friday, August 10, 1979-The Michigan Daily MICHIGAN TO BE HIT HARDER THAN NATION 'U' economists forecast mild recession (Continued from Page 1) per cent at the end of this year, and 7.1 per cent by fourth quarter 1980. BUT THE BASE inflation rate is likely to remain unchanged, according to the forecast. Large oil and food price increases pushed the inflation rate for consumer goods into double figures in the first half of 1979, but more modest price hikes in these areas should cause the inflation figure to drift back to around eight per cent during 1980, the report estimates. Hyman said a seven to eight per cent "base" inflation rate has become established over the years, perpetuated by expectations of continued inflation in that range by both business and con- sumers. Hyman said the rate has become firmly entrenched because producers anticipate its continuation when they increase prices, as do workers when they make wage demands. - Hymans said a severe economic slowdown "could smash those expec- tations. .. but that would require a much deeper recession than the people would want to go through or the gover- nment would want to engineer." A RECESSION, defined as two con- secutive quarters of inflation-adjusted decline in the Gross National Product (GNP), technically will exist if the GNP falls again this quarter, as expec- ted. "But ... the length and severity of the 1979 recession - as we forecast it - will qualify it as among the mildest of any recessions of recent record," the report says. "Indeed, it would be more informative to speak of 1979 as an economic slowdown that got a bit out of hand, rather than as a true recession in the sense of 1974-74 or 1957-58. "The costs of recession are measured in terms of job losses, shortened work weeks, bankruptcies, and the like," the forecast continues. "In relative terms, the recession of 1979 should impose small costs on the economic scene." THE REPORT e ys three basic fac- tors are helping' old the economy at a somewhat stagitated level: high prices, high interest rates (tight money), and modest attempts at reducing the tax burden on consumers. "You have to remember that the tight monetary policywent into effect last Nov. 1," Porter said. "The basic justification was to support the U.S. dollar abroad." She said the expected recovery in the GNP level is likely to be aided by the projected cancellation of the scheduled Social Security tax increase, moderation in both food and oil price rises, and the predicted reduction in the interest rate charged by the gover- nment to financial institutions for cer- tain loans. THE THREE economists make predictions several times each year using the "Michigan model", a com- puterized system using both economic and statistical analysis. Crucial statistics are fed into the complex model - which is constantly being revised - in order to arrive at the economic forecasts. Hymans, chairman of the economics department, said the University model is "one of a half-dozen in the country that involves a long reck - !)f continual forecasts." He said other current rredictions vary from forecasts of "long and hard recession to almost no recession." THE MICHIGAN model, like others, has proven to be accurate under some circumstances and somewhat off-base in others, Hymans said. Hymans and Porter, who both work full-time in the economics department, compiled the report with Harold Shapiro, a former chairman of the department. Shapiro, who currently is University vice-president for academic affairs, was selected by the University Board of Regents to become the 10th University presidentJan.1,1980. 2 contenders named for 'U' presidency (Continued from Page U STUDENT COMMITTEE member Rosenberg said earlier this week she knew O'Neil's name has been among the 50 placed on a narrowed down list, but was uncertain of his later status.. Rosenberg left the committee in April. O'Neil has been vactioning in Michigan with his family since mid- July and was unavailable for comment. He returned briefly to the Bloomington campus at the end of last month to at- tend a trustees' meeting. Sources in O'Neil's office and IU students said several months ago O'Neil was interested in the University post. Last year he was offered several presidencies at smaller institutions. In an article published during April in the Indiana Daily Student, the IU student newspaper, O'Neil said he would not be vice-president at IU much longer. "IT WOULDN'T be good for the university," he said in the article. "In every institution there needs to be a freshness of approach." Staff members of the Daily Student say O'Neil has little chance for advan- cement at IU because its president, John Ryan, has been there only a few years. University Regents and search com- mittee members who were contacted refused to comment on O'Neil's can- didacy. O'NEIL RECEIVED his bachelor and law degrees from Harvard. While he was finishing his law degree, he was director of a speech program at Tufts University in Medford, Mass. He also has taught history at Harvard, speech at San Francisco State College, and law at the University of California at Berkeley. He served as a law clerk for Supreme Court Justice William Bren- nan for two years. r He also held administrative posts at the State University of New York at Buffalo and the University of Cincinnati for seven years before assuming the Bloomington position. O'Neil teaches law at IU, in additon to his vice- presidential duties. CINEMA I PRESENTS CIASSIC SEXCOMEDIES NIGHT NOTHING SACRED WILLIAM WELLMAN, 1937 The screwiest-of-them-all screwball comedy. CAROLE LOMBARD feigns being exposed to radium poisoning (shades of Harrisburg, Pennsylvania!), releases this news to the press, and in her "last few weeks of life" blossoms from small-town nobody to the "sweetheart" of New York. Reporter FREDERICK MARCH is sent to fetch her from Vermont-when he arrives, the natives are surly, children stone him, and a small boy darts out from behind a picket fence and bites him in the leg. Hilarious. With WALTER CONNOLLY, CHARLES WINNIGER. (75 min.) 7:00 & 10:30 NINOTCHKA ERNEST LUBITSCH, 1939 GARBO Laughs! And who but Lubtsch could take the tragic figure of Garbo and create a clossic comedy around her. in this blithe satire, Garbo plays a severe. intellectural, hard-headed Soviet commissar who is sent to Paris to supervise a trio of bumbling Russian agents. But under the seductive minis- trations of the city of love, the ascetic Comrade melts into an affair with Parisian charmer, MELVYN DOUGLAS With a corrosive memorable script by Charles Brackett, Billy Wilder and Walter Reisch. "Your cornea is terrific." (0 min.) 8:30 only. AUD A, ANGELL HALL Single Feature $1.50, Double $2.50 WFSIPPORT PROJECTIONISTS LOCAL 395 SAMUELZ ARKOFFrPRESENTs A PROPESsIONA1rFILMS. INCRESEsNTATION JAMES BROLIN, MARGOT KIDDER and ROD STEIGER "THE AMITYVILLE HORROR" unce Also Starring MURRAY HAMILTON Music by LALO SCHIFRIN (R) Executive in Chaoge f Pmductio JERE HENSHAW HELD OVER-3rd WEEK Mon-Tue.-Wed.-Thur. 7:25-9:25 Sat.-Sun.-Wed.