"Southern California is unlikely to be affected nearly as muchas the Bay Area, but it will be affected. It's not immune," Boskinsaid, addressing a packed room at Newport Beach's Four SeasonsHotel. Boskin shared the stage with California State TreasurerPhilip Angelides at the Southern California Economic Summit, whichwas sponsored by Buchanan Street Partners and First American TitleInsurance Co., among others.

On the state level, Boskin said travel and tourism are twosectors that have been hard hit and will continue to be sluggishuntil at least early 2002. "That affects our state and localgovernments in various ways, our airports, hotel taxes, our cities,etc." The Gross State Product is also expected to shrink, Boskinadded, saying it will rebound next year. "This will be the slowestgrowth we've had in a long time, (but) it will be growth," hecommented. "We may not feel good about the state economy until2003, but it should start growing again sometime in the early partof next year." In the meantime, unemployment is expected to risestill higher, as Boskin predicts that there will be at least onemore round of layoffs. "A mild recession and a gradual recovery ismy outlook for the state," Boskin said.

For the nation as a whole, Boskin predicted that we should beout of the recession by the second quarter of next year, leading toa muted recovery for the economy. "But there certainly is a riskthat this could get worse…it's because the rest of the world is introuble," he warned. Boskin said his long-term outlook for theUnited States is optimistic, while it is pessimistic for Europe andonly cautiously optimistic for regions such as Latin America andJapan.