The National Bureau of Economic Research (NBER) is an American private

nonprofit A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, not-for-profit organization, or simply a nonprofit, is a non-governmental (private) legal entity organized and operated for a collective, public, or so ...

research organization "committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community." The NBER is known for proposing start and end dates for

recession In economics, a recession is a business cycle contraction that occurs when there is a period of broad decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be tr ...

s in the United States. Many chairpersons of the

Council of Economic Advisers The Council of Economic Advisers (CEA) is a United States agency within the Executive Office of the President established in 1946, which advises the president of the United States on economic policy. The CEA provides much of the empirical resea ...

were previously NBER research associates, including the former NBER president and

Harvard Harvard University is a private Ivy League research university in Cambridge, Massachusetts, United States. Founded in 1636 and named for its first benefactor, the Puritan clergyman John Harvard, it is the oldest institution of higher lear ...

professor Martin Feldstein. The NBER's current president and CEO is James M. Poterba of MIT.

History

Founding

The NBER was established in 1920 following 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 Columbia University in the City of New York, commonly referred to as Columbia University, is a Private university, private Ivy League research university in New York City. Established in 1754 as King's College on the grounds of Trinity Churc ...

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 Simon Smith Kuznets ( ; rus, Семён Абра́мович Кузне́ц, p=sʲɪˈmʲɵn ɐˈbraməvʲɪtɕ kʊzʲˈnʲets; April 30, 1901 – July 8, 1985) was a Russian-born American economist and statistician who received the 1971 Nobe ...

, who later played a pivotal role in developing the U.S. national income accounts. Kuznets' work laid the foundation for the

Nobel Prize The Nobel Prizes ( ; ; ) are awards administered by the Nobel Foundation and granted in accordance with the principle of "for the greatest benefit to humankind". The prizes were first awarded in 1901, marking the fifth anniversary of Alfred N ...

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 Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and ...

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, Massachusetts Cambridge ( ) is a city in Middlesex County, Massachusetts, United States. It is a suburb in the Greater Boston metropolitan area, located directly across the Charles River from Boston. The city's population as of the 2020 United States census, ...

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. In September 2010, after a conference call with its Business Cycle Dating Committee, the NBER declared that the

Great Recession The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009.

in the United States had officially ended in 2009 and lasted from December 2007 to June 2009. 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.

Research

The NBER's research activities encompass 20 research programs on different subjects and 14 working groups.

Research programs

* Asset Pricing * Children * Corporate Finance * Development Economics * Development of the American Economy * Economic Fluctuations and Growth * Economics of Aging * Economics of Education * Environment and Energy Economics * Health Care * Health Economics * Industrial Organization * International Finance and Macroeconomics * International Trade and Investment * Labor Studies * Law and Economics * Monetary Economics * Political Economy * Productivity, Innovation, and Entrepreneurship * Public Economics

Working groups

* Behavioral Finance * Chinese Economy * Cohort Studies * Economics of Crime * Entrepreneurship * Risks of Financial Institutions * Household Finance * Innovation Policy * Insurance * Market Design * Organizational Economics * Personnel Economics * Race and Stratification in the Economy * Urban Economics

Conferences

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.

Notable members

Winners of the Nobel Memorial Prize in Economic Sciences

Daron Acemoglu Kamer Daron Acemoğlu (;, ; born September 3, 1967) is a Turkish Americans, Turkish-American economist of Armenians in Turkey, Armenian descent who has taught at the Massachusetts Institute of Technology since 1993, where he is currently the Ja ...

, 2024 * Simon Johnson, 2024 * James A. Robinson, 2024 *

Claudia Goldin Claudia Dale Goldin (born May 14, 1946) is an American economic historian and labor economist. She is the Henry Lee Professor of Economics at Harvard University. In October 2023, she was awarded the Nobel Memorial Prize in Economic Sciences "fo ...

, 2023 *

Ben Bernanke Ben Shalom Bernanke ( ; born December 13, 1953) is an American economist who served as the 14th chairman of the Federal Reserve from 2006 to 2014. After leaving the Federal Reserve, he was appointed a distinguished fellow at the Brookings Insti ...

, 2022 *

Joshua Angrist Joshua David Angrist (; born September 18, 1960) is an Israeli American economist and Ford Professor of Economics at the Massachusetts Institute of Technology. Angrist, together with Guido Imbens, was awarded the Nobel Memorial Prize in Eco ...

, 2021 *

David Card David Edward Card (born 1956) is a Canadian-American labour economist and the Class of 1950 Professor of Economics at the University of California, Berkeley, where he has been since 1997. He was awarded half of the 2021 Nobel Memorial Prize in ...

, 2021 * Guido Imbens, 2021 * Abhijit Banerjee, 2019 *

Esther Duflo Esther Duflo, FBA (; born 25 October 1972) is a French-American economist currently serving as the Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics at the Massachusetts Institute of Technology (MIT). In 2019, she w ...

, 2019 * Michael Kremer, 2019 * William Nordhaus, 2018 * Paul Romer, 2018 * Richard Thaler, 2017 * Oliver Hart, 2016 * Bengt Holmström, 2016 * Angus Deaton, 2015 * Lars Peter Hansen, 2013 * Robert J. Shiller, 2013 * Alvin E. Roth, 2012 * Thomas J. Sargent, 2011 * Christopher A. Sims, 2011 * Peter Diamond, 2010 * Dale T. Mortensen, 2010 * Paul Krugman, 2008 * Finn E. Kydland, 2004 *

Edward C. Prescott Edward Christian Prescott (December 26, 1940 – November 6, 2022) was an American economist. He received the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, Nobel Memorial Prize in Economics in 2004, sharing the award with ...

, 2004 * Robert F. Engle, 2003 * George Akerlof, 2001 * Joseph Stiglitz, 2001 * James Heckman, 2000 * Daniel McFadden, 2000 *

Robert C. Merton Robert Cox Merton (born July 31, 1944) is an American economist, Nobel Memorial Prize in Economic Sciences laureate, and professor at the MIT Sloan School of Management, known for his pioneering contributions to continuous-time finance, especia ...

, 1997 * Myron Scholes, 1997 * Robert Lucas Jr., 1995 * Robert Fogel, 1993 * Gary Becker, 1992 *

George Stigler George Joseph Stigler (; January 17, 1911 – December 1, 1991) was an American economist. He was the 1982 laureate in Nobel Memorial Prize in Economic Sciences and is considered a key leader of the Chicago school of economics. Early life and e ...

, 1982 * Theodore Schultz, 1979 *

, 1976 * Wassily Leontief, 1973 *

, 1971

Council of Economic Advisers (CEA) Chairs

* Cecilia Rouse, 2021–2023 * Alan Krueger, 2011–2013 * Austan Goolsbee, 2010–2011 * Christina Romer, 2009–2010 * Edward Lazear, 2006–2009 *

, 2005–2006 * Harvey S. Rosen, 2005 * Greg Mankiw, 2003–2005 * Glenn Hubbard, 2001–2003 * Janet Yellen, 1997–1999 * Joseph Stiglitz, 1995–1997 * Michael Boskin, 1989–1993 * Martin Feldstein, 1982–1984 *

Arthur F. Burns Arthur Frank Burns (April 27, 1904 – June 26, 1987) was an American economist and diplomat who served as the 10th chair of the Federal Reserve, chairman of the Federal Reserve from 1970 to 1978. He previously chaired the Council of Economic Ad ...

, 1953–1956

Other notable members

* Alberto Alesina * Susan Athey * Robert Barro * Olivier Blanchard * John H. Cochrane * Aaron Edlin * John Lipsky * Francis Longstaff * Alan Marcus * Richard N. Rosett * Anna Schwartz * Eduardo Schwartz *

Andrei Shleifer Andrei Shleifer ( ; born February 20, 1961) is a Russian-American economist and Professor of Economics at Harvard University, where he has taught since 1991. Shleifer was awarded the biennial John Bates Clark Medal in 1999 for his seminal works ...

* Richard Zeckhauser

Funding

The NBER is funded by grants from government agencies, private foundations, corporate and individual contributions, and income from the NBER's investment portfolio. The largest donators are the

National Institutes of Health The National Institutes of Health (NIH) is the primary agency of the United States government responsible for biomedical and public health research. It was founded in 1887 and is part of the United States Department of Health and Human Service ...

, the

National Science Foundation The U.S. National Science Foundation (NSF) is an Independent agencies of the United States government#Examples of independent agencies, independent agency of the Federal government of the United States, United States federal government that su ...

, the

Social Security Administration The United States Social Security Administration (SSA) is an Independent agencies of the United States government, independent agency of the Federal government of the United States, U.S. federal government that administers Social Security (United ...

, and the Alfred P. Sloan Foundation.

Policy impact

In a 2010 report by the

University of Pennsylvania The University of Pennsylvania (Penn or UPenn) is a Private university, private Ivy League research university in Philadelphia, Pennsylvania, United States. One of nine colonial colleges, it was chartered in 1755 through the efforts of f ...

, the NBER was ranked as the second most influential domestic economic policy think tank, after the

Brookings Institution The Brookings Institution, often stylized as Brookings, is an American think tank that conducts research and education in the social sciences, primarily in economics (and tax policy), metropolitan policy, governance, foreign policy, global econo ...

Recession markers

The NBER is known for its start and end dates of U.S. recessions. The NBER is seen by some as an arbiter of whether the U.S. is in a recession. 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 as a retrospective marker. 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. 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. The NBER's Business Cycle Dating Committee, responsible for officially dating recessions, does not make real-time judgments or predict economic downturns. The committee's meetings are neither publicized nor on a fixed schedule. 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. The NBER uses a broader definition of a

than commonly appears in the media. The media commonly define a recession as two consecutive quarters of a shrinking

gross domestic product Gross domestic product (GDP) is a monetary measure of the total market value of all the final goods and services produced and rendered in a specific time period by a country or countries. GDP is often used to measure the economic performanc ...

(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". 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. The NBER prefers this method for a variety of reasons. First, it believes that 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 attempts to measure the duration of economic expansion and recession at a fine grain, it emphasized monthly, rather than quarterly, economic indicators. Finally, by using a looser definition, the NBER 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. However, the NBER does not precisely define what is meant by "a significant decline", but rather determines if one has existed on a case by case basis after examining catalogued factors that 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. 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 The dot-com bubble (or dot-com boom) was a stock market bubble that ballooned during the late-1990s and peaked on Friday, March 10, 2000. This period of market growth coincided with the widespread adoption of the World Wide Web and the Interne ...

References

External links

Official website
{{DEFAULTSORT:National Bureau Of Economic Research 1920 establishments in the United States 1920 in economic history Economic research institutes Non-profit organizations based in Massachusetts Organizations established in 1920 Political and economic think tanks in the United States Research institutes in Massachusetts