(FORTUNE Magazine) – ''Has Macro-Forecasting Failed?'' That's the title of a timely National Bureau of Economic Research paper by economist Victor Zarnowitz of the University of Chicago. The answer is -- what else? -- yes and no. Forecasters have gotten steadily better at anticipating growth rates during an expansion, Zarnowitz finds. But downturns are their downfall. Zarnowitz, 72, a leading expert on forecasting, has been following macroeconomic forecasters since the 1950s, when the craft was taking its baby steps. His newest book, Business Cycles: Theory, History, Indicators, and Forecasting, will be published shortly by the University of Chicago Press. (He also serves on the committee that dates U.S. recessions -- see next item.) Unexpected shocks sometimes catch the prognosticators by surprise, he says. More often, it's the gradual accumulation of stresses and imbalances that stymies them, because ''it is very difficult to predict just when these phenomena will culminate.'' But his research also hints at a psychological component. Says he: ''Few forecasters take the risk of signaling a recession prematurely, as the costs of such prediction to themselves and their customers can be quite high.'' In other words, the CEO would still rather err on the side of optimism than face lost sales and market share because of a lowball forecast. Don't shoot your macroeconomist, Zarnowitz urges. While the failure to call downturns is a major problem -- and one that should be at the top of forecasters' agendas for fixing -- the discipline has come a long way. On the whole, forecasters provide decision-makers in business and government with essential and reasonably accurate information about the direction of the economy, and they are a good bet to keep improving. Still, Zarnowitz adds, while you wait for those improvements, stay ready to respond to unforeseen changes.

CHART: NOT AVAILABLE CREDIT: Members of the American Statistical Association and the National Bureau of Economic Research; joint quarterly survey, 1968-90

CAPTION: THEY NEVER QUITE GOT IT RIGHT