That sound you hear is the popping of a financial bubble in housing, the economy and the market. And you can trace it all to Alan Greenspan's Federal Reserve.

Given the nature of this new conflict with terrorism, the economy is not likely to be revived by the developments that fueled previous wartime booms, like surging orders for tanks and airplanes or demand for workers to replace those who go off to fight.

This time, the course of the economy will be determined in large part by the relative power of two broader but opposing forces.

On the negative side is the uncertainty, and in some cases fear, that has gripped businesses, consumers and investors since Sept. 11, further weakening an economy that had been teetering on the brink of recession, if not already in one.

On the other side of the equation is government economic policy, which had been performing mild CPR on the decade-long business expansion through much of the year. But now fiscal and monetary stimulus are being engaged full force in an effort to make sure that the downturn after the terrorist attacks is as short and shallow as possible.

''The question is whether this situation will push us into recession or pull us out of it,'' said Martin N. Baily, who was chairman of the White House's Council of Economic Advisers under President Bill Clinton.

''The part pushing us into recession is that everyone is more concerned about risk,'' he said. ''The part pulling us out is increasing government spending, cutting taxes, being less concerned about the budget deficit and having the Fed move more aggressively to stimulate the economy than it probably would have without this attack.''

The Federal Reserve has lately been pulling out all the stops to cut interest rates. Congress and the Bush administration have already approved substantial increases in government spending and seem headed toward approval of a second round of tax cuts and additional stimulus measures this year.

By comparison with past efforts, however, the one-two punch of monetary and fiscal policy falls short of the equivalent of the war mobilization of the World War II era, and may not even pump up the economy in the way the Vietnam War did in the 1960's.

''My guess is that this is not going to be all that similar to previous wartime economies,'' said N. Gregory Mankiw, an economics professor at Harvard University. ''Unless the fiscal stimulus ends up being a lot bigger than I expect, the differences will be greater than the similarities to the past.''

Instead, the effectiveness of lower interest rates, higher government spending and tax cuts in turning the economy around will depend to some extent on how the battle against terrorism goes, and on whether the United States and its allies suffer retaliatory attacks.

Given that the modern-day economy of the United States is far more substantial than in the past, the combination should pack enough of a wallop, economists say, to keep the fallout from the terrorist attacks and the military response from overwhelming the nation's economic strengths. Moreover, once the worst of the war is over, it should set the stage for a healthy recovery, probably sometime next year.

In the past, wars have had varying effects on the economy.

On Dec. 7, 1941, the United States was still struggling to emerge from the Depression. The war effort finished the job, creating what amounted to a full-employment economy.

On Aug. 7, 1964, when Congress passed the Gulf of Tonkin resolution, giving its backing to increased American involvement in Vietnam, the economy was already recovered from a 10-month recession that ended in early 1961. Military spending helped keep the expansion going until 1969, even fueling inflation by over-stimulating growth.

On Aug. 2, 1990, when Iraq invaded Kuwait, the economy fell into what proved to be an eight-month recession. A spike in oil prices hurt the economy, and the modest and temporary increase in military spending was not enough to give the economy much of a lift.

On Sept. 11, it was already clear that the United States was enduring a sharp slowdown and that the expansion -- the longest on record -- might already have come to an end.

Despite a series of interest rate decreases by the Fed and a tax cut signed into law by President Bush, unemployment was creeping up, business investment in new factories and equipment had stalled, and consumers were growing increasingly jittery.

If the economy was not in recession before the attacks on the World Trade Center and the Pentagon, it almost certainly went into one afterward. Big companies have announced about 200,000 layoffs and have put expansion plans on hold.

The economy's strength in recent years has derived in part from a sense of excitement about the availability of jobs and the opportunities generated by technological advances, coupled with a drive by companies to drive down costs.

Both those factors are now at risk of being overwhelmed by fallout from the campaign against terror.

Companies in many industries now face the prospect of having to invest heavily in increased security, costs that do nothing for their bottom lines. Mr. Baily said El Al, the Israeli airline, spent about 4 percent of its own revenue on security, plus an amount equal to about 3 percent of its revenue from the Israeli government.

Airlines based in the United States, by contrast, have typically spent only about 2 percent of their revenues on security.

It is harder to put any figures on the potential for a loss of enthusiasm among investors, businesses and consumers.

''We simply do not know how the military action will play out, or what response there might be from the terrorists,'' said Ian Shepherdson, an economist at High Frequency Economics, a consulting firm. ''Even if the U.S. and other governments manage to foil attempted attacks, we do not know how American consumers will respond to what might amount to a state of perpetual national insecurity.''