Earnings momentum and visibility should continue to propel the {stock} market to new highs. -- Report issued by E.F. Hutton on Oct. 19, just before the stock market lost more than a fifth of its value.

It's that season again: the time of year when we're showered with speculations about the next 12 months. You sense, though, that the game isn't being played with its customary gusto. Everyone's going through the motions, but there's more than the usual cynicism, as if no one takes the predictions seriously.

There is, of course, some lingering combat fatigue. The crash of 1987 made most economic and financial forecasters -- not just the folks at E.F. Hutton -- look ignorant, if not stupid. But the greater source of unease lies in the recognition that we live in a truly global economy that we don't fully understand and, even if we did, might not be able to control.

The typical 1988 forecast is full of numbers that mask the uncertainties and anxieties. The one printed in the adjacent table, from the Organisation for Economic Co-operation and Development in Paris, reflects the consensus. A few economists predict recession. Some see a boom. But most expect tomorrow to be, more or less, like today. The U.S. economy will remain prosperous. Consumer spending will slow, and exports will rise. Unemployment and inflation won't change much. In Europe, lower exports will turn slow growth into meager growth. In Japan, higher consumer spending will offset slipping exports.

This standard forecast is as interesting as tomato soup. It also could be correct. The safest prediction is always for more of the same, because inertia is a powerful force. But even forecasters don't quite trust this cautious outlook. Their insecurities are making them incoherent. One forecasting firm recently said: "{T}he probability of a recession sometime during the next three years is nearly 50 percent. However, because it is less than 50 percent for any one of those years individually, our standard forecast does not include a recession." Oh.

Possibilities for trouble abound. One was glimpsed last week, as the dollar fell further on foreign exchange markets. The dropping dollar could force the United States to raise interest rates to prevent higher inflation (caused by more expensive imports). Meanwhile, foreign economies might slide into a slump because their exports to the U.S. market decline sharply. Everyone wants the world's trade imbalances -- the huge U.S. deficits and the immense surpluses of Japan, Germany and others -- to decline smoothly and gradually. But no one knows whether they will.

At a recent conference, a well-known and respected economist exclaimed: the equations don't work. In the contest between economists' computers and the real world, the computers have been creamed. The story of economics over the past 15 years is a junkyard full of discarded equations. The computers project past patterns into the future, but new technologies, government policies, business practices and popular beliefs constantly invent a future that isn't like the past. The equations for exchange rates are the latest additions to the scrap heap. They join battered formulas for inflation, interest rates, trade deficits and many others.

The image has always been absurd: an economist hunched over a computer keyboard, programming the future. But the effort has been doomed by a global economy that is greater than the sum of all its national economies. It's moved by huge trade flows, multinational companies, instant global communications and round-the-clock securities and foreign-exchange markets. Even if the pure economics were better understood, they would be periodically upset by politics.

There's an enduring contradiction at the core of the global economy. It's an amalgam of stateless pressures, and yet all governments are creatures of parochial politics and culture. Each pursues national advantage and seeks to insulate itself from forces beyond its control. The danger is that the pursuit of national gain and independence throws the global economy into a greater state of turbulence, making life more difficult for everyone.

It's impossible to ignore history. In the early decades after World War II, the United States helped resolve the contradiction. Its economic and political power were overwhelming. There was a consensus that American interests were furthered by world trade and an open global economy; those who disagreed were largely ignored. By its power and example, the United States provided leadership. Now U.S economic dominance has declined, while the complexities of the world economy have increased. And Americans are less enamored with the burdens of global leadership. The question is: How well will the world cope with this new situation?

The question hangs over 1988. No one can answer it, and it is the basic source of our worrying and wondering. So Happy New Year, everyone. That's a wish, not a prediction.

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---------------GLOBAL OUTLOOK-----------------------

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---------------------------1987-----------------1988

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United States

Growth(1)...............2.75%...............2.50%

Inflation(2)............3.00%...............3.50%

Unemployment rate.......6.25%...............6.00%

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Japan

Growth..................3.50%...............3.50%

Inflation.............. 0.25%...............1.00%

Unemployment rate.......3.00%...............3.00%

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Europe(3)

Growth..................2.25%...............1.75%

Inflation...............4.50%...............4.00%

Unemployment rate......10.75%..............11.00%

(1) Rise in gross national product.

(2) GNP deflator.

(3) Western Europe: Austria, Belgium, Britain, Denmark, Finland, France, Greece, Iceland, Ireland, Italy, Luxembourg, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, West Germany.

SOURCE: Organisation for Economic Co-operation and Development