Outlook for 2008.

• Author: Conover, Jerry N.

For 35 years, a group of Indiana University faculty has gathered at the Kelley School of Business each fall to consider the economic outlook for the coming year. In the process, they forecast the prospects in terms of global, national, state, metropolitan, and agriculture perspectives, and they also assess the outlooks for the financial and housing markets.

This year's discussion began with a review of the latest forecast based on the econometric model of the United States developed by Indiana University's Center for Econometric Model Research (CEMR). The researchers then made adjustments to the model's predictions to accommodate expectations about key underlying variables. The CEMR model of Indiana's economy similarly provided a basis for projecting the outlook for the state.

These economists and distinguished colleagues presented their predictions to audiences across Indiana through the Kelley School's Business Outlook Panel program. In each city, an expert on the local economy joined the panel to discuss the outlook for the metro area. The 2008 predictions of all the Business Outlook panelists are presented in this issue of the Indiana Business Review, along with additional supporting detail.

In general, the economy in 2007 moved as the panel predicted a year ago, but at a slower and more volatile pace as a result of major challenges posed by high energy prices and troubles in the housing and credit markets. The year ahead is marked by similar, significant risks, but the panel still expects the national economy to grow moderately in 2008.

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The 2008 outlook issue of the Indiana Business...