In this paper, outage performance of hybrid automatic repeat request with incremental redundancy (HARQ-IR) is analyzed. Unlike prior analyses, time-correlated Nakagami-$m$ fading channel is considered. The outage analysis thus involves the probability distribution analysis of a product of multiple correlated shifted Gamma random variables and is more challenging than prior analyses. Based on the finding of the conditional independence of the received signal-to-noise ratios (SNRs), the outage probability is exactly derived by using conditional Mellin transform. Specifically, the outage probability of HARQ-IR under time-correlated Nakagami-$m$ fading channels can be written as a weighted sum of outage probabilities of HARQ-IR over independent Nakagami fading channels, where the weightings are determined by a negative multinomial distribution. This result enables not only an efficient truncation approximation of the outage probability with uniform convergence but also asymptotic outage analysis to further extract clear insights which have never been discovered for HARQ-IR even under fast fading channels. The asymptotic outage probability is then derived in a simple form which clearly quantifies the impacts of transmit powers, channel time correlation and information transmission rate. It is proved that the asymptotic outage probability is an inverse power function of the product of transmission powers in all HARQ rounds, an increasing function of the channel time correlation coefficients, and a monotonically increasing and convex function of information transmission rate. The simple expression of the asymptotic result enables optimal power allocation and optimal rate selection of HARQ-IR with low complexity. Finally, numerical results are provided to verify our analytical results and justify the application of the asymptotic result for optimal system design.
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