Beyond its primary purpose in assessing the economic outlook in the state, a new study by the University of Maryland at College Park makes a valuable contribution to the continuing dialogue on the dramatic shift in the region's economy.

In the short-hand vernacular used to describe the state of the economy, hackneyed terms such as slowdown, slump and downturn just never seemed to put the trend in proper context. The study by the University of Maryland's Department of Economics appears to do just that in describing what has happened in these past several months. Maryland's economy is in transition, assert the study's authors, Mahlon R. Straszheim and Lorraine Sullivan Monaco, chairman and instructor, respectively, in the university's economics department.

As explained by the authors, the transition is from "a period of rapid growth in real income and employment, accompanied by moderate rates of inflation, to a period of substantially slower real growth, higher inflation and increasing uncertainty in product, labor and financial markets." Those changes tend to mirror those of the national economy, Straszheim and Monaco noted in the study, titled, "Outlook for the State of Maryland Economy."

The changes mirror not only those in the national economy but also trends in the region that includes the District and much of Virginia as well as Maryland. Indeed, transition is the very word a speaker used in describing the region's economic performance at a recent meeting of Washington-area executives.

The transition in Maryland's case is likely to continue at least through next year, Straszheim indicated in an interview this week. Even at the end of 1991 -- assuming the national economy improves significantly -- growth will be moderate at best, he believes.

That obviously has strong implications for the region's economy, which, as Straszheim noted the other day, thrived as the service sector expanded in the 1980s. The parallels between Maryland and the region are quite apparent in Straszheim's and Monaco's analysis of the transition from robust to moderate to slow growth in the state. "While the Maryland economy performed better than the U.S. economy for much of the 1980s, this competitive advantage will be reduced in the near future. The prospects for Maryland's economy are far less rosy than six months ago ... ; the sudden national slowdown poses risks to the state, which has been labeled relatively 'recession-proof.' "

Certainly the slowdown in the national economy poses some risks even for the once "recession-proof" economy in metropolitan Washington. What's more, the same analysis could easily have been applied to the huge crescent-shaped area that extends from just north of Baltimore to Norfolk.

Near-term prospects in that region, which generally outperformed the U.S. economy in the 1980s, are surely less rosy than they were six months ago. All of Virginia is joining the nation in suffering from "stagflation," the College of William and Mary's school of business administration noted in a recent report. Indeed, 1991 will be a "painful experience for the Commonwealth," the William and Mary report concluded.

Far from ascribing gloom and doom to Maryland's economy, Straszheim and Monaco have taken what might be called a measured approach in assessing current and likely future conditions in the state. "We don't have the rosy picture that we enjoyed in the '80s but it is considerably better than that enjoyed by some of our neighboring states," Straszheim emphasized.

Maryland's economy will show little real growth during the next 12 months, and unemployment rates will increase, the Straszheim-Monaco study shows. In the meantime, say the authors, "significant cutbacks in state and local government expenditures seem a virtual certainty in the next year."

Already, two of Maryland's wealthier counties -- both in the Washington area -- face that reality as the economy continues to slow. Prince George's County officials began a belt-tightening drill a month ago, having projected a decline in revenue of at least $25 million. Just this week, Montgomery County announced a hiring freeze and a projected budget shortfall of $68 million next year. Indeed, state officials estimate a budget deficit of close to $200 million.

Not only will state and local officials have to adjust to a downturn in the office market, inflationary pressures and slower real growth but, says Straszheim, "the speculative bubble has burst in the housing market." Moreover, the slowdown "is coming from the higher end" of the income scale.

Straszheim is confident, nonetheless, that once the slowdown runs its course, probably around the end of 1991, Maryland's economy will again perform better than the national average. "I think we'll know more about the economy six months from now. A dramatic positive {effect} would be a big change overall in inflation."

Still, Maryland has several advantages that should help it rebound much faster than the national economy once the transition from slow to moderate growth ends, according to Straszheim.

The study points out, for example, that Maryland is a coastal state with favorable environmental amenities; Washington, as the center of federal government, will continue to be a strategic location for businesses and interest groups; and the state has a growing, educated work force. "A business service-based economy will continue to provide a competitive advantage in the 1990s. However, this competitive advantage will likely be less in the 1990s than in the 1980s," the authors suggest.

Chances are a study of the region's economy would lead to a similar conclusion.