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National Bureau of Economic Research
	The building in Cambridge, Massachusetts that contains the NBER main offices
Abbreviation	NBER
Founded	1920; 104 years ago
Founder	Wesley Clair Mitchell
Type	Nonprofit organization
Tax ID no.	13-1641075
Location	Cambridge, Massachusetts, United States; 42°22′11″N 71°06′46″W / 42.3697°N 71.1127°W;
Leader	James M. Poterba
Revenue	$41.7 million (in 2023)
Expenses	$38.5 million (in 2023)
Website	nber.org

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.

History

Founding

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]

Research

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

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.^[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)

Cecilia Rouse, 2021–2023
Alan Krueger, 2011–2013
Austan Goolsbee, 2010–2011
Christina Romer, 2009–2010
Edward Lazear, 2006–2009
Ben Bernanke, 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, 1953–1956

Other notable members

(In alphabetical order by last name)

Funding

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]