National Bureau of Economic Research

Last updated

National Bureau of Economic Research
Founded1920;104 years ago (1920)
Founder Wesley Clair Mitchell
Type Nonprofit organization
Leader James M. Poterba
Revenue (2022)
$42.1M [2]
Expenses (2022)$33.7M [2]

The National Bureau of Economic Research (NBER) is an American private nonprofit research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community." [3] The NBER is known for proposing start and end dates for recessions in the United States.


Many chairpersons of the Council of Economic Advisers were previously NBER research associates, including the former NBER president and Harvard professor, Martin Feldstein. The NBER's current president and CEO is James M. Poterba of MIT.



The NBER was established in 1920 due to debates during the Progressive era over income distribution. Founded by Malcolm Rorty and Nachum Stone, the NBER aimed to fill the information gap on economic data. The organization's research is restricted to presenting data and findings without making policy recommendations.

Early years

The NBER initially received support from the Carnegie Foundation, the Laura Spelman Rockefeller Foundation, and various corporations. Columbia University professor Wesley Clair Mitchell was the first director of research, guiding the organization's research for 25 years. The NBER's initial projects included measuring labor's share of national income and studying unemployment and business-cycle fluctuations.

Simon Kuznets

In 1927, Mitchell brought in Simon Kuznets, who later played a pivotal role in developing the US national income accounts. Kuznets' work laid the foundation for the Nobel Prize he received in 1971.

Post-War expansion

After World War II, the NBER expanded its research scope. Arthur Burns succeeded Mitchell as research director. The 1950s and 1960s saw groundbreaking work by Milton Friedman and Anna Schwartz on monetary policy's impact on business cycles. Research in labor economics also flourished during this period.

Presidential leadership

Arthur Burns became NBER's president in 1956, followed by John R. Meyer in 1967. Meyer introduced several initiatives, including two NBER journals and the establishment of NBER offices in various cities.

Martin Feldstein era

In 1977, Martin S. Feldstein became the NBER's president, transforming the organization. He expanded the NBER's network of university-based affiliates, moved its headquarters to Cambridge, and introduced the NBER Working Paper Series. Feldstein also established research programs focusing on specific areas and initiated the NBER Summer Institute.

Recent years

James Poterba succeeded Feldstein in 2008, continuing the NBER's expansion. The number of affiliated researchers grew significantly, and new programs and working groups were introduced. The NBER now distributes over 1,200 new research studies annually and holds around 125 meetings each year on various economic topics. [4]


The NBER's research activities are mostly identified by 20 research programs [5] on different subjects and 14 working groups. [6]


The NBER convenes over 120 meetings each year at which researchers share and discuss their latest findings and launch new projects. The Summer Institute, a collection of nearly 50 smaller meetings, is held annually in July. [7]

Notable members

Winners of the Nobel Memorial Prize in Economic Sciences

(In descending chronological order and by last name)

Council of Economic Advisers (CEA) Chairs

(In descending chronological order)

Other notable members

(In alphabetical order by last name)


According to the NBER, they are funded by grants from government agencies, private foundations, by corporate and individual contributions, and by income from the NBER's investment portfolio. The largest donators currently are the National Institute of Health, the National Science Foundation, the Social Security Administration, and the Alfred P. Sloan Foundation. [8]

Policy impact

In a 2010 report by the University of Pennsylvania, the NBER was ranked as the second most influential domestic economic policy think tank (the first was the Brookings Institution). [9]

Recession markers

The NBER is also known for its start and end dates of US recessions. The NBER is claimed by some to serve the role as an arbiter of whether the U.S. is in a recession or not. [10] The National Bureau of Economic Research (NBER) does not function as a real-time arbiter in determining the onset and duration of recessions but rather serves as a retrospective marker. [11] The origins of this role can be traced to the 1960s when the Commerce Department began publishing a digest that relied on NBER's analysis of the business cycle. [10] The recession markers are made by the Business Cycle Dating Committee, whose eight members are selected by the president of the NBER. The eight members tend to be highly distinguished economists. [10] The NBER's Business Cycle Dating Committee, responsible for officially dating recessions, does not make real-time judgments or predict economic downturns. [12] The committee's meetings are held on the third floor of NBER's headquarters. [10] The meetings are neither publicized nor on a fixed schedule. [10] The board's decisions are not always unanimous, but the disagreements within the committee tend not to be about the presence of a recession; rather they are about the specific start and end points of the recession. [10]

The NBER uses a broader definition of a recession than commonly appears in the media. A definition of a recession commonly used in the media is two consecutive quarters of a shrinking gross domestic product (GDP). In contrast, the NBER defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales". [13] Business cycle dates are determined by the NBER dating committee. Typically, these dates correspond to peaks and troughs in real GDP, although not always so. [14]

The NBER prefers this method for a variety of reasons. First, they feel by measuring a wide range of economic factors, rather than just GDP, a more accurate assessment of the health of an economy can be gained. For instance, the NBER considers not only the product-side estimates like GDP, but also income-side estimates such as the gross domestic income (GDI). Second, since the NBER wishes to measure the duration of economic expansion and recession at a fine grain, they place emphasis on monthly—rather than quarterly—economic indicators. Finally, by using a looser definition, they can take into account the depth of decline in economic activity. For example, the NBER may declare not a recession simply because of two quarters of very slight negative growth, but rather an economic stagnation. [15] However, they do not precisely define what is meant by "a significant decline", but rather determine if one has existed on a case by case basis after examining their catalogued factors which have no defined grade scale or weighting factors. The subjectivity of the determination has led to criticism and accusations committee members can "play politics" in their determinations. [16]

Though not listed by the NBER, another factor in favor of this alternate definition is that a long-term economic contraction may not always have two consecutive quarters of negative growth, as was the case in the recession following the bursting of the dot-com bubble. [15]

Announcement of end of 2007–2009 recession

In September 2010, after a conference call with its Business Cycle Dating Committee, the NBER declared that the Great Recession in the United States had officially ended in 2009 and lasted from December 2007 to June 2009. [17] [18] In response, a number of newspapers wrote that the majority of Americans did not believe the recession was over, mainly because they were still struggling and because the country still faced high unemployment. [19] [20] [21] However, the NBER release had noted that "In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The trough marks the end of the declining phase and the start of the rising phase of the business cycle." [22]

See also

Related Research Articles

In economics, a recession is a business cycle contraction that occurs when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending. This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock, the bursting of an economic bubble, or a large-scale anthropogenic or natural disaster.

An economic depression is a period of carried long-term economic downturn that is the result of lowered economic activity in one major or more national economies. Economic depression maybe related to one specific country where there is some economic crisis that has worsened but most often reflexes historically the American Great Depression and similar economic status that may be recognized as existing at some country, several countries or even in many countries. It is often understood in economics that economic crisis and the following recession that maybe named economic depression are part of economic cycles where the slowdown of the economy follows the economic growth and vice versa. It is a result of more severe economic problems or a downturn than the recession itself, which is a slowdown in economic activity over the course of the normal business cycle of growing economy.

Business cycles are intervals of general expansion followed by recession in economic performance. The changes in economic activity that characterize business cycles have important implications for the welfare of the general population, government institutions, and private sector firms. There are numerous specific definitions of what constitutes a business cycle. The simplest and most naïve characterization comes from regarding recessions as 2 consecutive quarters of negative GDP growth. More satisfactory classifications are provided by, first including more economic indicators and second by looking for more informative data patterns than the ad hoc 2 quarter definition.

<span class="mw-page-title-main">Simon Kuznets</span> American economist and statistician (1901–1984)

Simon Smith Kuznets was a Russian-born American economist and statistician who received the 1971 Nobel Memorial Prize in Economic Sciences "for his empirically founded interpretation of economic growth which has led to new and deepened insight into the economic and social structure and process of development."

<span class="mw-page-title-main">Martin Feldstein</span> American economist (1939–2019)

Martin Stuart Feldstein was an American economist. He was the George F. Baker Professor of Economics at Harvard University and the president emeritus of the National Bureau of Economic Research (NBER). He served as president and chief executive officer of the NBER from 1978 to 2008. From 1982 to 1984, Feldstein served as chairman of the Council of Economic Advisers and as chief economic advisor to President Ronald Reagan. Feldstein was also a member of the Washington-based financial advisory body the Group of Thirty from 2003.

<span class="mw-page-title-main">Arthur F. Burns</span> American economist and diplomat (1904–1987)

Arthur Frank Burns was an American economist and diplomat who served as the 10th chairman of the Federal Reserve from 1970 to 1978. He previously chaired the Council of Economic Advisers under President Dwight D. Eisenhower from 1953 to 1956, and served as the first Counselor to the President under Richard Nixon from January to November 1969. He also taught and researched at Rutgers University, Columbia University, and the National Bureau of Economic Research.

<span class="mw-page-title-main">Early 2000s recession</span> Recession that occurred in the early 2000s

The early 2000s recession was a decline in economic activity which mainly occurred in developed countries. The recession affected the European Union during 2000 and 2001 and the United States from March to November 2001. The UK, Canada and Australia avoided the recession, while Russia, a nation that did not experience prosperity during the 1990s, began to recover from it. Japan's 1990s recession continued.

Procyclical and countercyclical variables are variables that fluctuate in a way that is positively or negatively correlated with business cycle fluctuations in gross domestic product (GDP). The scope of the concept may differ between the context of macroeconomic theory and that of economic policy–making.

Robert Ernest "Bob" Hall is an American economist who serves as a professor of economics at Stanford University, and as the Robert and Carole McNeil Senior Fellow at the Hoover Institution. He is generally considered a macroeconomist, but he describes himself as an applied economist.

The reference dates of the United States' business cycles are determined by the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER), which looks at various coincident indicators such as real GDP, real personal income, employment, and sales to make informative judgments on when to set the historical dates of the peaks and troughs of past business cycles. The NBER was founded in 1920, and the first business cycle dates published in 1929.

<span class="mw-page-title-main">Subprime mortgage crisis</span> 2007 mortgage crisis in the United States

The American subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the 2007–2008 global financial crisis. The crisis led to a severe economic recession, with millions of people losing their jobs and many businesses going bankrupt. The U.S. government intervened with a series of measures to stabilize the financial system, including the Troubled Asset Relief Program (TARP) and the American Recovery and Reinvestment Act (ARRA).

<i>A Monetary History of the United States</i>

A Monetary History of the United States, 1867–1960 is a book written in 1963 by Nobel Prize–winning economist Milton Friedman and Anna J. Schwartz. It uses historical time series and economic analysis to argue the then-novel proposition that changes in the money supply profoundly influenced the U.S. economy, especially the behavior of economic fluctuations. The implication they draw is that changes in the money supply had unintended adverse effects, and that sound monetary policy is necessary for economic stability. Orthodox economic historians see it as one of the most influential economics books of the century. The chapter dealing with the causes of the Great Depression was published as a stand-alone book titled The Great Contraction, 1929–1933.

<span class="mw-page-title-main">Great Moderation</span> Phenomenon in economies of developed nations since the mid-1980s

The Great Moderation is a period in the United States of America starting from the mid-1980s until at least 2007 characterized by the reduction in the volatility of business cycle fluctuations in developed nations compared with the decades before. It is believed to be caused by institutional and structural changes, particularly in central bank policies, in the second half of the twentieth century.

<span class="mw-page-title-main">Great Recession</span> Global economic decline from 2007 to 2009

The Great Recession was a period of marked general decline observed in national economies globally, i.e. a recession, that occurred in the late 2000s. The scale and timing of the recession varied from country to country. At the time, the International Monetary Fund (IMF) concluded that it was the most severe economic and financial meltdown since the Great Depression. One result was a serious disruption of normal international relations.

<span class="mw-page-title-main">Global recession</span> Recession that affects many countries around the world

A global recession is recession that affects many countries around the world—that is, a period of global economic slowdown or declining economic output.

<span class="mw-page-title-main">Christina Romer</span> Economist

Christina Duckworth Romer is the Class of 1957 Garff B. Wilson Professor of Economics at the University of California, Berkeley and a former chair of the Council of Economic Advisers in the Obama administration. She resigned from her role on the Council of Economic Advisers on September 3, 2010.

The Economic Cycle Research Institute (ECRI) based in New York City, is an independent institute formed in 1996 by Geoffrey H. Moore, Anirvan Banerji, and Lakshman Achuthan. It provides economic modeling, financial databases, economic forecasting, and market cycles services to investment managers, business executives, and government policymakers.

In the United States, the Great Recession was a severe financial crisis combined with a deep recession. While the recession officially lasted from December 2007 to June 2009, it took many years for the economy to recover to pre-crisis levels of employment and output. This slow recovery was due in part to households and financial institutions paying off debts accumulated in the years preceding the crisis along with restrained government spending following initial stimulus efforts. It followed the bursting of the housing bubble, the housing market correction and subprime mortgage crisis.


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  16. Maggs, John (April 19, 2010). "Who Decides When The Recession Ends?". National Journal . Archived from the original on April 23, 2010.
  17. "Recession 'over,' but the mood is glum". Buffalo News. September 27, 2010.
  18. "Economist who called recession's end sees recovery". Investment News. September 28, 2010.
  19. "CNN Poll: Nearly three-fourths say recession not over". CNN. September 26, 2010.
  20. "Meaning of word 'recession' varies". Delmarva News. September 28, 2010.[ permanent dead link ]
  21. "Editorial: Too early to say recession has run its course in U.S." The Daily Republic. September 28, 2010. Archived from the original on May 17, 2013.
  22. "Business Cycle Dating Committee, National Bureau of Economic Research". National Bureau of Economic Research. September 20, 2010.