Gail D. Fosler is senior vice president and chief economist of The Conference Board, one of the world's leading research and business membership organizations. She directs the New York-based organization's worldwide Economics Research Program, which produces major studies on economic policy issues and the widely watched Leading Economic Indicators, the Consumer Confidence Index, the Help-Wanted Index and the Business Confidence Index. Her unit now produces leading economic indicators for the United States, United Kingdom, Australia, France, Germany, Japan, Korea, Mexico and Spain.
     The Wall Street Journal twice has named Fosler America's most accurate economic forecaster. She recently received the prestigious Annual Blue Chip Economic Forecasting Award for accurately forecasting major economic trends over the past four years.

What is your outlook on the global economy for 2004?
It is easy to understate the growth prospects for the United States and the world economy in 2004. The economic consensus has upgraded the U.S. outlook to "moderate growth," with varying degrees of optimism reserved for different global regions. These judgments are too modest. The U.S. and world economies are on the threshold of a genuine boom - and likely to record the best year since 1984.

Can you quantify your projections?
The Conference Board revised its 2004 forecast up to 5.9 percent. The global growth outlook is now at about 5 percent. Most parts of the world are growing at near 6 percent or better - with Europe and Japan lagging in the 3 percent range, certainly a good performance for both of these regions.

What does the economic data suggest?
The expansion signal from The Conference Board's Leading Economic Index is growing stronger. Unlike the 2001-2002 period, where much of the rise in the index was driven by its financial components, virtually all of the 10 component series are now rising. The strength in the United States is reflected in The Conference Board's leading indexes for other countries as well. In contrast to the early 1990s, when the rest of the world lagged the recovery in the United States, and Europe weathered a full-fledged recession in the aftermath of German unification, all global regions are expanding at the same time. Although there are some differences in volatility, the leading indexes for Europe are catching up to the strength in the Asia index (See Trade Data chart).

What are the key factors that will influence this year's growth prospects?
There is nothing new about this economy except the amount of liquidity required to propel it forward - here and abroad. Flexibility, organizational responsiveness, and cost control will all be important to maximizing the short-term opportunities and minimizing the damage of longer-term risks.

What about caution signs?
Prices, costs, and interest rates are likely to rise suddenly, possibly without warning, creating instability in the United States and in the rest of the world to which it is so closely linked.

More detailed discussion of The Conference Board's 2004 economic outlook is available in the January 2004 issue of the group's Straight Talk newsletter. More information is available online at http://www.conference-board.org/economics