Abstract

The article presents a business forecast for the year, 1974. The latest revision of the University of California at Los Angeles (UCLA) Business Forecast was prepared by economists at the Graduate School of Management in mid-October, 1973, when the latest war in the Middle East was two weeks old. The forecast assumes that the war will not involve the U.S. It further assumes that the war will not escalate U.S. defense expenditures significantly nor reduce the importation of oil from Arab countries enough to have an impact on U.S. output of goods and services. Further, it is expected that federal tax rates will not be increased and that the U.S. President, Richard M. Nixon Administration will be generally successful in holding the line on federal expenditures. In addition, it is assumed that the Federal Reserve System will move to a more moderate and less restrictive monetary policy at least by the second half of 1974. Finally, the forecast assumes that price and wage controls will be phased out in the early months of 1974.