Wharton Econometric Forecasting Associates

Wharton Economic Forecasting Associates (WEFA) was a world-leading Economics forecasting and consulting organisation founded by Nobel Prize winner Lawrence Klein.

WEFA was a spinoff of the Wharton School of the University of Pennsylvania, where Klein taught. WEFA traced an interesting path from its predecessor in 1961 (the ERU), its initial launch in 1969 [WEFA] , to its ultimate merger with DRI (formerly Data Resources Inc.) to form Global Insight in 2001, as summarized in the timeline below.

Incooporated in 1969 by the Trustees of the University of Pennsylvania as a "not for profit" organization, WEFA was an outgrowth of the Economics Research Unit (ERU) located in the economics department of the University of Pennsylvania. The ERU, a research unit devoted to grauduate economics education, was originally sponcered [in 1961] by grants from five US corporations including, IBM, Bethlehem Steel, John Deer, Exxon and Sunoco.

Among other things, the ERU was originally charged with the maintenance and use of the Wharton Quarterly Model [WQM] and the Wharton Index of Capacity Utilization. Between 1961 and 1969 the number of sponcers increased to the point where a more efficient organization was needed [WEFA] to manage the many projects that grew out of the operation of the Wharton Quarterly Model.

In 1969, when WEFA was incorporated, the Director of the ERU was Dr. F. G. Adams who also became a board member of WEFA. Dr. Michael D. McCarthy was appointed Executive Director of WEFA, Inc. in May of 1969 by Lawrence Klein, board chairman. After joining WEFA as Director of Industrial Research in August of 1969, Dr. Ross S. Preston was appointed Executive Director of WEFA in December of 1970.

Preston served as Executive Director until the spring of 1975, at which time he was appointed Secretary-Treasury of WEFA. During Preston's tenure as Executive Director, WEFA not only expanded its sponcership of the Wharton Quarterly Model [WQM] , but also developed the Wharton Annual and Industry Forecasting Model [WAIFM] which integrated input-output theory within the structure of a macro-econometric model. The predecessor of WAIFM was the Brookings Quarterly Model, originally funded by the Social Science Research Council

WEFA's LINK project, which produced the world's first global model macroeconomic model, was mentioned in Klein's citation for the Economic Sciences in 1980.

General corporate timeline

*1963: Wharton Econometric Forecasting Associates is founded as a non-profit. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = Big Forecasters Failed to Predict Own Misfortune
newspaper = Los Angeles Times
pages =
year = 1985
date = 1985-3-3
url = ]
*July 14, 1979: McGraw-Hill announces it plans to buy Data Resources, a major competitor of Wharton Econometric Forecasting Associates for about $103 million. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = McGraw-Hill announces it plans to buy Data Resources headed by Prof Otto
newspaper = New York Times Abstracts
pages =
year = 1979
date = 1979-7-14
url = ]
*December 18, 1979: It is announced that University of Pennsylvania plans to sell its controlling interest in Wharton Econometric Forecasting Associates, and has held talks with three potential buyers. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = Pennsylvania Univ to sell controlling interest in its Wharton Econometric
newspaper = New York Times Abstracts
pages =
year = 1979
date = 1979-12-18
url = ]

*June 12, 1980: Ziff-Davis Publishing Co., a privately held publishing and broadcasting company, purchased Wharton Econometric Forecasting Associates Inc. from the University of Pennsylvania for an undisclosed amount. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = ZIFF CORP. PLANS ENTRY INTO FINANCIAL-INFORMATION SYSTE
newspaper = The Wall Street Journal
pages =
year = 1980
date = 1980-6-18
url = ] The University said it retained a minority interest. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = ZIFF CORP. ACQUIRES WHARTON ECONOMETRIC FORECASTING
newspaper = Dow Jones News Service
pages =
year = 1980
date = 1980-6-12
url = ] Ziff announced that Wharton Econometric Forecasting Associates would be the cornerstone of a new company, Strategic Information, which planned to spend tens of millions of dollars in the next five to six years to acquire state of the art computer equipment, according to Dennis O'Brien, who was named COO and Executive Vice President. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = ZIFF CORP. PLANS ENTRY INTO FINANCIAL-INFORMATION SYSTE
newspaper = The Wall Street Journal
pages =
year = 1980
date = 1980-6-18
url = ]
*March 18, 1983: Cie International de Services en Informatique (CISI), a computer firm owned by the French government, acquires an 80 percent interest in Wharton Econometrics from Ziff Davis Publishing Co, and an option to buy the remaining 20 percent in 1985. At the time, Wharton Econometrics is expected to generate revenue of USD 8 million in 1983. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = Cie International de Services en Informatique of France has acquired an 80% interest in Wharton Econometrics of Philadelphia, USA from Ziff Davis.
newspaper = Textline Multiple Source Collection (1980-1994)
pages =
year = 1983
date = 1983-3-18
url = ]
*June 20, 1983: CISI Wharton, part of the French CEA, announces plans to invest USD 12 million over the next three years to position the newly enlarged entity as one of the world's leading economic forecasters. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = CISI Wharton, part of the French CEA, is to invest $12m over the next 3 years, making the newly enlarged entity one of the world's leading economic forecasters.
newspaper = Les Echos
pages =
year = 1983
date = 1983-6-20
url = ]

*November 16, 1986: It is announced that WEF Associates, a group of European investors headed by M Gerard Vila, would acquire CISI Wharton. At the time, CISI Wharton was described as having generated losses of FFr 100m in 1984-85 on revenue of FFr 94m, and employing 200 people. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = CEA Industrie of France, part of Commissariat a l'Energie Atomique, is selling its economic information and forecasting division, CISI Wharton, to WEF Associates of Switzerland.
newspaper = Textline Multiple Source Collection (1980-1994)
pages =
year = 1986
date = 1986-11-16
url = ]

*April 1, 1987: WEF Associates AG, the parent of Wharton Econometric Forecasting Associates, announced that it acquired Chase Econometrics from Chase Manhattan Bank N.A., a unit of Chase Manhattan Corp, and that the new entity would be called WEFA-CEIS, Wharton Consulting and Economic Consulting and Economic Information Services. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = WEF ASSOCIATES ACQUIRES CHASE ECONOMETRICS
newspaper = Dow Jones News Service
pages =
year = 1987
date = 1987-4-1
url = ] Chase Econometrics had been founded by Michael Kaye Evans, who had previously collaborated with Klein at Wharton but parted ways. An earlier magazine article had described Wharton Econometrics as "austere and academic", Data Resources as "cerebral and expanding", and Chase as "outspoken and controversial". [cite web| url = http://www.time.com/time/magazine/article/0,9171,912479,00.html| title = Flash and a Touch of Brash| accessdate = 2007-05-05| date = 1979-06-25| format = HTML| publisher = Time.] Lawrence Chimerine, chairman of Chase Econometrics, became chairman and CEO, of the new business, while Lawrence Klein was positioned to act as a consultant and continue to oversee the board. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = Wharton's Swiss Parent Buys Chase Econometrics --- A Wall Street Journal News Roundup
newspaper = The Wall Street Journal
pages =
year = 1987
date = 1987-4-2
url = ]

*April 11, 1987: Wharton Econometrics and Chase Econometrics agreed to call the merged companies Wharton Economics rather than the originally proposed name, WEFA-CEIS. According to the CEO Lawrence Chimerin, the term "econometrics" was dropped, because the consolidated company would broaden its services from econometric modeling to areas such as financial analysis, planning support, and software development. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = COMPANY NEWS; Company Returns To Wharton Name
newspaper = The New York Times
pages =
year = 1987
date = 1987-4-11
url = ]

*August 2, 1994: Information Partners, a private investment group affiliated with Bain Capital and focused on investments and acquisitions in the information services marketplace, announced that it had completed the purchase of The WEFA Group. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = Information Partners completes purchase of The WEFA Group
newspaper = Business Wire
pages =
year = 1994
date = 1994-8-2
url = ] The transaction was later valued at USD 20 million. [cite web| url = http://www.privateequityweek.com/buy/protected/yearenddeal94_1.html| title = Year End Deal List 1994| accessdate = 2007-05-05| date = unknown| format = HTML| publisher = Private Equity Week.]

*January 16, 1997: Primark Corporation, headed by chairman and CEO Joseph E. Kasputys, announced it entered into an agreement to acquire WEFA Holdings Inc. from Bain Capital Inc. and other shareholders in a USD 45 million cash transaction. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = Primark Corporation to Acquire WEFA Holdings, Inc.
newspaper = PR Newswire
pages =
year = 1997
date = 1997-1-16
url = ] According to Primark, WEFA had revenues of about USD 29 million in 1996 and was profitable. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = Primark Corporation to Acquire WEFA Holdings, Inc.
newspaper = PR Newswire
pages =
year = 1997
date = 1997-1-16
url = ] It was also reported that in selling WEFA, Information Partners had earned a ninefold return on its August 1994 acquisition. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = Cognizant to Report $5.4 Million First Quarter Gain From Sale of WEFA Group, Inc.
newspaper = PR Newswire
pages =
year = 1997
date = 1997-3-19
url = ] In its press release, Primark said Allen Sinai was named to the new position as WEFA's chief global economist, and that William Mundell would continue as WEFA's president and chief executive. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = Primark Completes Acquisition of WEFA Holdings, Inc.
newspaper = PR Newswire
pages =
year = 1997
date = 1997-2-7
url = ]

*Early-1997 to June 1998: Primark holds discussions with several prospective buyers, including Reed Elsevier. Reed Elsevier withdrew its offer while it dealt with a possible merger with Wolters Kluwer. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = Thomson Corp. to Acquire Primark
newspaper = Information Today
pages =
year = 2000
date = 2000-7-1
url = ]

*June 5, 2000: The Thomson Corporation announced that it would acquire Primark Corporation. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = The Thomson Corporation to Acquire Primark
newspaper = Business Wire
pages =
year = 2000
date = 2000-6-5
url = ] At this point, Primark's key brands included A-T Financial Information, Baseline, Disclosure, Datastream, Global Access, GlobalTOPIC, I/B/E/S, MarketEye, PIMS, WEFA, Worldscope and Vestek. Thomson announced that is was looking at how it could integrate Primark's offerings with its own brands such as ILX and First Call. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = Thomson Corp. to Acquire Primark
newspaper = Information Today
pages =
year = 2000
date = 2000-7-1
url = ] The deal came as a further sign of Thomson's moves to extract itself from some of its traditional operations such as small-circulation newspapers to move toward electronic-based business. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = Thomson snaps up U.S. giant Buys major financial information firm Primark for $842-million, continuing its makeover into e-powerhouse
newspaper = The Globe and Mail
pages =
year = 2000
date = 2000-6-6
url = ] It was announced that Thomson was acquiring Primark for approximately USD 842 million, and the assumption of USD 235 million in Primark debt, while Primark had 1999 revenues of USD 495 million. Joseph E. Kasputys, Primark's Chairman and Chief Executive Officer, became Chairman of Thomson Financial. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = The Thomson Corporation to Acquire Primark
newspaper = Business Wire
pages =
year = 2000
date = 2000-6-5
url = ]

*March 2001: Joseph Kasputys forms Global Insight, Inc. to be a leading company providing business executives, investors and government officials with economic information, analysis and solutions. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = DRI-WEFA Announces Appointment of Chief Economist
newspaper = PR Newswire
pages =
year = 2001
date = 2001-5-17
url = ]

*May 7, 2001: Global Insight announced it would acquire DRI and WEFA from their respective parent companies to form its first subsidiary, DRI-WEFA Inc. DRI, formerly known as Data Resources Inc. was at this point a unit of The McGraw-Hill Companies, a New York publisher and financial services company, while WEFA was a unit of The Thomson Corporation, a Toronto diversified information company. Joseph Kasputys was the chairman and main shareholder in Global Insight and led the acquisition. [Citation
last = Hilsenrath
first = Jon
author-link =
last2 =
first2 =
author2-link =
title = McGraw-Hill, Thomson Units Merge to Form Separate Entity
newspaper = The Wall Street Journal
pages =
year = 2001
date = 2001-5-7
url = ] At the time of the merger, Kasputys, who had previous roles as a senior executive of both WEFA and DRI, said that he had wanted to bring together DRI and WEFA since 1990. [Citation
last = Loyd
first = Linda
author-link =
last2 =
first2 =
author2-link =
title = Eddystone, Pa., Economic Research Firm to Merge with Massachusetts Company
newspaper = Knight Ridder Tribune Business News - KRTBN
pages =
year = 2001
date = 2001-5-8
url = ] Kasputys had also been executive vice president of McGraw-Hill until 1987. At the point of the merger, WEFA had about 220 employees and DRI about 250. [Citation
last = Loyd
first = Linda
author-link =
last2 =
first2 =
author2-link =
title = Eddystone, Pa., Economic Research Firm to Merge with Massachusetts Company
newspaper = Knight Ridder Tribune Business News - KRTBN
pages =
year = 2001
date = 2001-5-8
url = ] At its peak, DRI, the larger of the two, had brought in USD 100 million in revenue. [Citation
last = Hilsenrath
first = Jon
author-link =
last2 =
first2 =
author2-link =
title = McGraw-Hill, Thomson Units Merge to Form Separate Entity
newspaper = The Wall Street Journal
pages =
year = 2001
date = 2001-5-7
url = ] Including new subsidiaries Primark Decision Economics; DAFSA, a European market research company; and Primark Poland, a software development company; Global Insight was planned to employ about 500, have 30 offices world wide, and have annual revenue of USD 70 million. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = Global Insight Creates Economic Powerhouse With Five Acquisitions
newspaper = PR Newswire
pages =
year = 2001
date = 2001-5-8
url = ]
*2005: Global Insight reportedly generates revenue of USD 86 million. [Citation
last =
first =
author-link =
last2 =
first2 =
author2-link =
title = Lexington's Eye on the World
newspaper = The Boston Globe
pages =
year = 2006
date = 2006-6-1
url = ]

References