"Southern California is unlikely to be affected nearly as much as the Bay Area, but it will be affected. It's not immune," Boskin said, addressing a packed room at Newport Beach's Four Seasons Hotel. Boskin shared the stage with California State Treasurer Philip Angelides at the Southern California Economic Summit, which was sponsored by Buchanan Street Partners and First American Title Insurance Co., among others.

On the state level, Boskin said travel and tourism are two sectors that have been hard hit and will continue to be sluggish until at least early 2002. "That affects our state and local governments in various ways, our airports, hotel taxes, our cities, etc." The Gross State Product is also expected to shrink, Boskin added, saying it will rebound next year. "This will be the slowest growth we've had in a long time, (but) it will be growth," he commented. "We may not feel good about the state economy until 2003, but it should start growing again sometime in the early part of next year." In the meantime, unemployment is expected to rise still higher, as Boskin predicts that there will be at least one more round of layoffs. "A mild recession and a gradual recovery is my outlook for the state," Boskin said.

For the nation as a whole, Boskin predicted that we should be out of the recession by the second quarter of next year, leading to a muted recovery for the economy. "But there certainly is a risk that this could get worse…it's because the rest of the world is in trouble," he warned. Boskin said his long-term outlook for the United States is optimistic, while it is pessimistic for Europe and only cautiously optimistic for regions such as Latin America and Japan.