JON HELGASON

UA economist Marshall Vest speaks about the status of the nation's economy at a press conference in McClelland Hall on Friday. Vest discussed the recession facing the country as well as his personal account of surviving the World Trade Center disaster.

Monday October 1, 2001

UA economist who was at World Trade Center says attacks will affect economy

UA economist Marshall Vest told members of the press Friday that the Sept. 11 terrorist attacks will continue to have harmful effects on local, national and international economies.

Vest, who experienced the attacks firsthand while attending a conference in the World Trade Center, said many economists had predicted a recession before the attacks, but the U.S. economy took a major blow the moment the World Trade Center was hit.

The effects of the disaster have also fallen over into the university economy, he said. Proposed state budget cuts could take $14 million or more from the University of Arizona budget for 2002.

"It's an absolute disaster for the university, and I'm extremely worried," Vest said. "I think that (the cuts) may be ironic given the need of the public to expect the government to protect them. It would be unfortunate if the public good were affected. I think the terrorists would have won."

"It's important for the state not to pull the trigger on the budget too quickly," he added.

He said Tucson has managed to suffer less than other major cities despite its reliance on tourism. He added, however, that the local economy should see more losses throughout the year as winter visitors may opt to stay close to home.

Economics professor Stanley Reynolds said last week that the airline industries' cut in flights has had a major effect on nearly all industries, particularly on tourism.

"There's still a great deal of uncertainty," Vest said. "We're going to have to come back and revisit the outlook many times, I'm sure, over the weeks and months ahead."

Vest pointed to a survey of National Association for Business Economics members taken on Sept. 20 and 21. The survey found 18 of the 21 panelists agree that the nation is in a recession.

Thirteen said they believe the terrorist attacks caused it.

Vest said economists will see a clear view of how badly the economy has been hit by the middle of November.

"In the short term, there is a huge impact," he said.

The recession could last until mid-2002, Vest said. At that point, he said the economy should begin to grow rapidly because of large government spending on re-building and money for the airline industry, Vest and Reynolds both said.

In the meantime, Vest said nearly all industries are suffering