e Micigan Daily
Vol. XCI, No. 59-2
Ann Arbor, Michigan-Tuesday, August 11, 1981
Ten Cents
Twelve Pages
economists
predict surge
in economy
ByJOHN ADAM
Daily staff writer
The nation's economy will recover
from its current-recession and enter a
period of rapid growth by the end of the
year, a team of University economists
predicted in a report released yester-
day.
The growth period is expected to be
accompanied by slowing inflation,
sharp improvement in unemployment
rates, and record federal budget
deficits much greater than those en-
visioned in the Reagan ad-
ministration's budget plans.
THE FORECAST is based on the
econometric model constructed by the
University Research Seminar in Quan-
titative Economics, directed by
economics and statistics Prof. Saul
Hymans. University President Harold
Shapiro, and Economists Joan Crary, a
research scientist, and Prof. E. Philip
Howrey aided Hymans in this update of
the Economic Outlook issued last
November.
Basically, two things have changed
since the November report, Hymans
explained. The four researchers now
know the dimensions of the gover-
nment's fiscal program since Reagan's
tax and budget proposals were recently
passed by Congress. And the Federal
Reserve has held to a stricter monetary
policy than the team of researchers
orignially forecast.
THIS TIGHT monetary policy with its
high interest rates is the cause of the
current small recession, Hymans said.
"But the recession will be minor and
over at the end of the year."
Boy injured by'U' bus
Ambulance attendants care for 12-year-old Donald Moore after he collided
with a University bus on his bicycle yesterday afternoon. Moore, of Ann Ar-
bor, was riding at "top bicycle speed," police saidacross the Diag toward
the intersection of State St. and William St. when he ran off the curb and into
the rear right side of a bus. The bus had just started up after being stopped at
the light. Moore was reportedly in good condition at University hospital,
where he was taken, and was expected to be released later last night.
Hymans
... forecasts a sharp upturn
The short run economic outlook as
outlined in the forecast, appears rather
bright.
INFLATION-In the absence of adver-
se supply shocks in areas such as food
prices; crude oil prices, and spot shor-
tages of raw industrial materials, the
rate of inflation will continue to edge
downward. During the first half of next
year the annual inflation rate is
forecast to be 7.1 percent, dropping fur-
ther to 6.8 percent in the second half of
the year.
U NE MP LOY ME NT-T he une m-
ployment rate, is predicted to rise
See PERIOD, Page 2
LSA 's new
dean faces dhe
Schallenge of
axing $471,000 e
By PAMELA KRAMER
Daily staff writer
Although University administrators say the most
dramatic budget cuts in LSA are over, the College's
belt still needs to be tightened by $471,048 during the
coming year on the University's road to "smaller but
better."
LSA's new dean, Peter Steiner, in office for only
slightly more than a month, discussed how those ad-
ditional cuts would be made.
"WE WERE GIVEN a major reduction to achieve,
and we were unable to achieve it in one year," Steiner
explained. So the College "in a couple of different
ways borrowed money" to buy time for making the
required cutbacks.
In a letter to LSA faculty members released last
June, then-Acting Dean John Knott said, "The six
percent cut in the College's base budget confronted us
last fall with a $2,187,795 problem." Officials tried to
solve that problem by putting a hiring freeze on open
faculty positions, planning varying reductions for in-
dividual departments, and eliminating the geography
department altogether.
BUT EVEN AFTER those plans were set down on
paper, and after Vice President for Academic Affairs
Bill Frye reduced the size of the required LSA budget
cut by $300,000, the College is still left with the task of
cutting an additional $471,048 to meet its 1981-82 goal.
"I consider the problem very serious, but not im-
possible," Dean Steiner said. "Smaller but better
means we can't do everything. (These times) force
difficult choices on us."
STEINER SAID he hopes "perhaps to postpone"
some of the cuts in the LSA budget for a year through
taking out more loans. Beyond that, he said, "there
will be a reduction in the size of the faculty, but not
through random attrition."
Some LSA departments will be given contraction
goals to meet during the next few years, and most of
the cuts will occur at the departmental level, accor-
ding to Steiner. Students will have input to the
See NEW, Page 4