National Bureau for Economic Research (NBER)

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The National Bureau for Economic Research (NBER) is a private economic research institute, founded in 1920, and serves as the semi-official tabulator of the US Business Cycle.

The NBER was the brainchild of Malcolm C. Rorty, an engineer-economist at AT&T.  One of Rorty's duties was to put out an AT&T house bulletin on current business conditions.  Part of that involved scanning the radical and socialist press for signs of labor unrest.  In 1916, Rorty stumbled on an article in the Intercollegiate Socialist magazine, written by Nahum I. Stone,  formerly a statistician at the US Tariff Commission, now a consultant on labor disputes. Stone's article was a review and critique of Nearing's 1916 famous study of income distribution.  Rorty entered into communication with Stone, and in the course of their conversation they came up with the idea of establishing an independent committee, composed of economists of all schools of thought, and including representatives of labor and business interests, to establish an authoritative and objective statistical accounting of income distribution in the United States.  

Rorty and Stone roped in three of the most prominent empirical economists of the time: Edwin F. Gay at Harvard, Wesley C. Mitchell at Columbia and John R. Commons at Wisconsin (then also serving as president of the AEA).  They were soon joined in 1917 by Allyn A. Young (then at Cornell and serving that year as president of the ASA), Thomas S. Adams (a fiscal expert at Yale), John P. Frey (a labor union journalist) and George E. Roberts (vice-president of National City Bank).  They formed the kernel of a "Committee on the Distribution of Income" by June 1917, and a prospectus was issued describing its objectives and seeking to raise funds. 

The entry of the United States into WWI and the problems of reconstruction distracted the attentions of many participants, but the wartime experience also highlighted the importance and necessity of good and accurate statistics.  The funds were finally in place in 1919, the lion's share  pledged by the Commonwealth Fund. By this time, the issue of business cycles had become a hot topic, and it was agreed that the committee should take that on as a secondary topic.  The finalization of organization was made during the Winter meetings of the American Economic Association in December 1919, and the National Bureau of Economic Research was formally chartered and launched in January, 1920.  Edwin F. Gay was to serve as its first president, and Wesley C. Mitchell was to serve as its first director of research, leading the team of statisticians on national income for the next quarter-century.

At its foundation, the NBER charter stated that its objective was "To encourage, in the broadest and most liberal manner, investigation, research and discovery, and the application of knowledge to the well-being of mankind; and in particular to conduct, or assist in the making of, exact and impartial investigations in the field of economic, social and industrial science, and to this end to cooperate with governments, universities, learned societies and individuals".  A 19-member Board of Directors was instituted, which included a balanced representation of views and interests.  It included ex officio representatives of the AEA and ASA, as well as six designated universities (Harvard, Yale, Chicago, Wisconsin and Pennsylvania) (the board was increased to 22 in 1927).  Plans to include representatives of the Federal Reserve and US departments of Treasury, Commerce and Labor were nixed as it might compromise the political independence of the NBER.

The NBER put out a periodic Bulletin until 1940, when it was replaced by the "Occasional Paper" series.


 

 

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Resources on the NBER

  • NBER website
  • "Toward a Firmer Basis of Economic Policy: The founding of the National Bureau of Economic Research" by Solomon Fabricant, 1984 [nber]
  • "Ch.2 - The Early History of the NBER" by R.W. Fogel et al, 2013, Political Arithmetic [nber]
  • NBER annual reports
    • Economic Progress and Economic Change: Annual report for 1953, 1954. [nber]
    • Government in Economic Life: Annual Report for 1954, 1955 [nber]
    • Basic Research and the Analysis of Current Business Conditions: Annual Report for 1955, 1956 [nber]
    • Financial Research and Problems of the Day: Annual Report for 1956, 1957 [nber]
    • Investing in Common Knowledge: Annual Report for 1957, 1958 [nber]
    • The Study of Economic Growth: Annual report for 1958, 1959. [nber]
    • A Respect for the Facts, Annual Report for 1959, 1960 [nber]
    • Towards a Firmer Basis of Economic Policy: Annual Report for 1960, 1961 [nber]
    • The Task of Economics: Annual Report for 1964, 1965 [nber]
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