"In the end, what happens will depend on what happens in the war on terrorism," says Dederick, who was a member of the Reagan administration. "There's a war out there, and we don't even know for sure who our enemy is…we don't know how big it will be. George Bush said we're going to eradicate evil in the world. That sounds like a big war to me."

The economy would react positively if the assault on Afghanistan turned out to be similar to Grenada, Dederick explained, not so well if it turned into a prolonged stand-off similar in duration to the hostage situation that dogged Jimmy Carter's final months in the White House. However, he and Ratajczak agree the current war already is somewhere in the middle.

"We thought we would've made more progress," Dederick says.

Ratajczak, an inflation expert whose Atlanta-based company invests in technology-based companies, says the best-case scenario at the start of the US' war effort was that the Taliban would cave in quickly after bombs started dropping on its country.

"That did not occur," he says. "The best-case is not happening."

Worst-case, Ratajczak says, is that the conflict would cause Islamic revolts to erupt around the world. "So far, that isn't occurring, either," he adds. "There are a lot of cases in between."

Meanwhile, Ratajczak notes that 600,000 jobs have been lost since May, another 750,000 have been estimated to be lost in the wake of Sept. 11 while another 250,000 could be slashed during the anthrax scares. About 1 million jobs have been in manufacturing, he adds, noting industrial production has fallen in 13 of the previous 14 months.

"I don't think there's a person out there who prepared for 1.6 million fewer jobs in January than there were a year ago," Ratajczak says. "We don't need office space. They'll be more sublease space coming on the market…As far as industrial space, the bad news is we still have to get rid of some inventory. But we're going to need back-up inventory now."

Just as the heady economy of the 1990s and 2000 was driven largely by consumer spending, the retail sector already is feeling effects, says Neil G. Bluhm, principal of Chicago-based Walton Street Capital."Traffic at good malls has remained fairly good," says Bluhm, former co-chairman of Urban Shopping Centers. "However, the shoppers are not shopping. They're looking rather than spending."

The keynote speaker Friday agreed with the economists that psychology will play a large role in the economy. Ratajczak noted consumers spent the days after the attacks on the World Trade Center and Pentagon mesmerized by television coverage. More recently, anthrax scares have become a preoccupation.

"The economic impact of anthrax is exceedingly small," Ratajczak says. "However, the psychological impact is large."