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Wesley Clair Mitchell
Wesley Clair Mitchell
|Born||August 5, 1874|
Rushville, Illinois, U.S.
|Died||October 29, 1948 74) (aged|
New York City, U.S.
|Institution|| NBER 1920–45|
Columbia University 1913–44
UC Berkeley 1903–12
University of Chicago 1899–1903
|Field|| Political economics |
|Alma mater||University of Chicago|
|J. Laurence Laughlin|
| Simon Kuznets |
Arthur F. Burns
Raymond J. Saulnier
|Influences|| Thorstein Veblen |
|Contributions||Empirical research on Business cycles|
|Part of a series on|
Wesley Clair Mitchell (August 5, 1874 – October 29, 1948) was an American economist known for his empirical work on business cycles and for guiding the National Bureau of Economic Research in its first decades.
An economist is a practitioner in the social science discipline of economics.
The business cycle, also known as the economic cycle or trade cycle, is the downward and upward movement of gross domestic product (GDP) around its long-term growth trend. The length of a business cycle is the period of time containing a single boom and contraction in sequence. These fluctuations typically involve shifts over time between periods of relatively rapid economic growth and periods of relative stagnation or decline.
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." The NBER is well known for providing start and end dates for recessions in the United States.
Mitchell was referred to as Thorstein Veblen's "star student."
Thorstein Veblen was a Norwegian-American economist and sociologist, who during his lifetime emerged as a well-known critic of capitalism.
Paul Samuelson named Mitchell (along with Harry Gunnison Brown, Allyn Abbott Young, Henry Ludwell Moore, Frank Knight, Jacob Viner, and Henry Schultz) as one of the several "American saints in economics" born after 1860.
Paul Anthony Samuelson was an American economist. The first American to win the Nobel Memorial Prize in Economic Sciences, the Swedish Royal Academies stated, when awarding the prize in 1970, that he "has done more than any other contemporary economist to raise the level of scientific analysis in economic theory". Economic historian Randall E. Parker has called him the "Father of Modern Economics", and The New York Times considered him to be the "foremost academic economist of the 20th century".
Harry Gunnison Brown was a Georgist economist teaching at Yale in the early 20th century. Paul Samuelson named Brown in a list of "American saints in economics" that included only 6 other economists born after 1860.
Allyn Abbott Young was an American economist. He was born into a middle-class family in Kenton, Ohio. He died aged 52 in London, his life cut short by pneumonia during an influenza epidemic. He was then at the height of his intellectual powers and current president of Section F of the British Association. Uniquely, Young had also been president of the American Statistical Association (1917) and the American Economic Association (1925).
Mitchell was born in Rushville, Illinois, the second child and oldest son of a Civil War army doctor turned farmer. In a family with seven children and a disabled father with an appetite for business ventures "verging on rashness" a lot of responsibility fell on the oldest son. Despite these challenges, Wesley Clair went to study at the University of Chicago and was awarded a PhD in 1899.
Rushville is a city in Schuyler County, Illinois, United States. The population was 3,192 at the 2010 census and 3,212 in 2000. It is the county seat of Schuyler County.
The University of Chicago is a private research university in Chicago, Illinois. Founded in 1890, the school is located on a 217-acre campus in Chicago's Hyde Park neighborhood, near Lake Michigan. The University of Chicago holds top-ten positions in various national and international rankings.
Mitchell's career as a researcher and teacher took the following course: instructor in economics at Chicago (1899–1903), assistant professor (1903–08) and professor (1909–12) of economics at the University of California, Berkeley, visiting lecturer at Harvard University (1908–09), lecturer (1913) and full professor (1914–44) at Columbia University. In 1916 he was elected as a Fellow of the American Statistical Association.
The University of California, Berkeley is a public research university in Berkeley, California. It was founded in 1868 and serves as the flagship campus of the ten campuses of the University of California. Berkeley has since grown to instruct over 40,000 students in approximately 350 undergraduate and graduate degree programs covering numerous disciplines.
Harvard University is a private Ivy League research university in Cambridge, Massachusetts, with about 6,700 undergraduate students and about 13,100 postgraduate students. Established in 1636 and named for its first benefactor, clergyman John Harvard, Harvard is the United States' oldest institution of higher learning. Its history, influence, wealth, and academic reputation have made it one of the most prestigious universities in the world. It has often been cited as the world's top university by most publishers.
Columbia University is a private Ivy League research university in New York City. Established in 1754 near the Upper West Side region of Manhattan, Columbia is the oldest institution of higher education in New York and the fifth-oldest institution of higher learning in the United States. It is one of nine colonial colleges founded prior to the Declaration of Independence, seven of which belong to the Ivy League. It has been ranked by numerous major education publications as among the top ten universities in the world.
He was one of the founders of the New School for Social Research, where he taught for a time between 1919 and 1922, and of the National Bureau of Economic Research (1920), where he was director of research until 1945.
There were interruptions for government service during the First World War and Mitchell served on many government committees; he was chairman of the President's Committee on Social Trends (1929–33). In 1923–4 he was president of the American Economic Association. Mitchell and John Whitridge Williams represented the United States at the World Population Conference held in Geneva, Switzerland in 1927.From 1941 he was on the original standing committee of the Foundation for the Study of Cycles.
The National Bureau was the institution through which Mitchell had greatest influence. There his important associates included Arthur Burns and Simon Kuznets. In his autobiography Kuznets acknowledges his "great intellectual debt to Mitchell."
Mitchell has also made valuable contributions to the history of economic thought.
Mitchell was married to Lucy Sprague Mitchell, a pioneering educator and the founder of Bank Street College of Education. He assisted his wife with the founding of the school.
Mitchell’s teachers included economists Thorstein Veblen and J. L. Laughlin and philosopher John Dewey. Although Veblen and Dewey did more to shape Mitchell’s outlook, Laughlin supervised his dissertation. Laughlin's main interest was in currency questions; he was a strong opponent of the quantity theory of money. The currency question facing the US in the 1890s was the choice between alternative monetary standards: inconvertible paper, gold monometallism and gold/silver bimetallism.
Mitchell’s thesis, published as A History of the Greenbacks, considered the consequences of the inconvertible paper regime established by the Union in the Civil War. However this, and the follow-up study Gold Prices and Wages Under the Greenback Standard, transcended conventional monetary history of the kind Laughlin did and provided a comprehensive quantitative account of the behavior of the US economy in the recent past.
Mitchell's next project, which would occupy him for the rest of his life, was the study and measurement of the business cycle, which was then emerging as the big problem in economics. His magnum opus, Business Cycles appeared in 1913. The Preface begins
This book offers an analytic description of the complicated processes by which seasons of business prosperity, crisis, depression, and revival come about in the modern world. The materials used consist chiefly of market reports and statistics concerning the business cycles which have run their course since 1890 in the United States, England, Germany and France.
In chapter I Mitchell reviews 13 theories of the business cycle and admits that "All are plausible." He then puts them aside, arguing,
To observe, analyse, and systematise the phenomena of prosperity, crisis, and depression is the chief task. And there is better prospect of rendering service if we attack this task directly, than if we take the round about way of considering the phenomena with reference to the theory.
Mitchell's research strategy was thus quite different from that adopted by H. L. Moore or Irving Fisher who started from a hypothesis and went looking for evidence to support it. Moore and Mitchell offer another contrast in that, while Moore embraced the new statistical methods of correlation and regression, Mitchell found little use for them.
Thirty years later Mitchell was still working on business cycles and he published another large work, Measuring Business Cycles with A.F. Burns. This book presented the characteristic "National Bureau" methods of analyzing business cycles. While Mitchell was still following the 1913 agenda, other economists had taken to studying the economy using models and even to constructing macroeconometric models. Against this background of Keynesian economics and the new econometric methods Mitchell and his project looked dated.
Milton Friedman believed that, "Mitchell is generally considered primarily an empirical scientist rather than a theorist". However, Mitchell's main creative efforts went into his empirical work on business cycles. Mitchell stated an endogenous theory, based on the internal dynamics of capitalism. Whereas neoclassical theories are deduced from unproven psychological axioms, he builds his theory from inductive generalities gained from empirical research. Also, he was considered a critic of conventional economic theory. As influenced greatly by Veblen, Mitchell is usually categorized with him as an American institutionalist.
There is a bibliography in the volume edited by Burns (below). Lucy Sprague Mitchell, Wesley Mitchell's wife, wrote the book Two lives; the story of Wesley Clair Mitchell and myself (New York, Simon and Schuster, 1953).
Econometrics is the application of statistical methods to economic data in order to give empirical content to economic relationships. More precisely, it is "the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference". An introductory economics textbook describes econometrics as allowing economists "to sift through mountains of data to extract simple relationships". The first known use of the term "econometrics" was by Polish economist Paweł Ciompa in 1910. Jan Tinbergen is considered by many to be one of the founding fathers of econometrics. Ragnar Frisch is credited with coining the term in the sense in which it is used today.
Joseph Aloïs Schumpeter was an Austrian political economist. Born in Moravia, he briefly served as Finance Minister of Austria in 1919. In 1932, he became a professor at Harvard University where he remained until the end of his career, eventually obtaining U.S. citizenship.
Ragnar Anton Kittil Frisch was a Norwegian economist and the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969. He is known for being one of the founders of the discipline of econometrics, and for coining the widely used term pair macroeconomics/microeconomics in 1933.
Lawrence Robert Klein was an American economist. For his work in creating computer models to forecast economic trends in the field of econometrics in the Department of Economics at the University of Pennsylvania, he was awarded the Nobel Memorial Prize in Economic Sciences in 1980 specifically "for the creation of econometric models and their application to the analysis of economic fluctuations and economic policies." Due to his efforts, such models have become widespread among economists. Harvard University professor Martin Feldstein told the Wall Street Journal that Klein "was the first to create the statistical models that embodied Keynesian economics," tools still used by the Federal Reserve Bank and other central banks.
Simon Smith Kuznets was an 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."
Institutional economics focuses on understanding the role of the evolutionary process and the role of institutions in shaping economic behaviour. Its original focus lay in Thorstein Veblen's instinct-oriented dichotomy between technology on the one side and the "ceremonial" sphere of society on the other. Its name and core elements trace back to a 1919 American Economic Review article by Walton H. Hamilton. Institutional economics emphasizes a broader study of institutions and views markets as a result of the complex interaction of these various institutions. The earlier tradition continues today as a leading heterodox approach to economics.
A macroeconomic model is an analytical tool designed to describe the operation of the problems of economy
of a country or a region. These models are usually designed to examine the comparative statics and dynamics of aggregate quantities such as the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the level of prices.
Henry Ludwell Moore was an American economist known for his pioneering work in econometrics. Paul Samuelson named Moore as one of the several "American saints in economics" born after 1860.
Arthur Frank Burns was an American economist. His career alternated between academia and government. From 1927 to the 1970s, Burns taught and researched at Rutgers University, Columbia University, and the National Bureau of Economic Research.
Applied economics is the application of economic theory and econometrics in specific settings. As one of the two sets of fields of economics, it is typically characterized by the application of the core, i.e. economic theory and econometrics, to address practical issues in a range of fields including demographic economics, labour economics, business economics, industrial organization, agricultural economics, development economics, education economics, engineering economics, financial economics, health economics, monetary economics, public economics, and economic history.
Christopher Albert "Chris" Sims is an American econometrician and macroeconomist. He is currently the John J.F. Sherrerd '52 University Professor of Economics at Princeton University. Together with Thomas Sargent, he won the Nobel Memorial Prize in Economic Sciences in 2011. The award cited their "empirical research on cause and effect in the macroeconomy".
Arnold Zellner was an American economist and statistician specializing in the fields of Bayesian probability and econometrics. Zellner contributed pioneering work in the field of Bayesian analysis and econometric modeling.
The Juglar cycle is a fixed investment cycle of 7 to 11 years identified in 1862 by Clément Juglar. Within the Juglar cycle one can observe oscillations of investments into fixed capital and not just changes in the level of employment of the fixed capital, as is observed with respect to Kitchin cycles. 2010 research employing spectral analysis confirmed the presence of Juglar cycles in world GDP dynamics.
James Harold Stock is an American economist and a professor of economics at Harvard University. He is co-author of Introduction to Econometrics, a leading undergraduate textbook, and co-editor of the Brookings Papers on Economic Activity. Stock served as a Chair of the Harvard Economics Department from 2007 to 2009 and as a member of President Obama's Council of Economic Advisers from 2013 to 2014.
Malcolm Churchill Rorty was an American engineer, economist, statistician and manager for the American Telephone and Telegraph Company. He is known as one of the founding members of the Econometric Society, and co-founder of the National Bureau of Economic Research, and in 1931 was elected presidents of the American Statistical Association. Rorty wrote numerous monographs on economic topics in which he opposed an "ultra-conservative viewpoint.", and defended "a laissez-faire approach to business."
Geoffrey Hoyt Moore, whom The Wall Street Journal called “the father of leading indicators”, spent several decades working on business cycles at the National Bureau of Economic Research, where he helped build on the work of his mentors, Wesley Clair Mitchell and Arthur F. Burns. Moore also served as commissioner of the Bureau of Labor Statistics from March 1969 to January 1973.
Morris Albert Copeland was a US economist who criticized 20th-century macroeconomic theory, and who contributed to the development of modern flow of funds theory.