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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 over the Nearing study, and in the course of their discussion, realized that the entire public debate on distribution then raging in the United States was marred by lack of reliable statistics on income shares.  Academics, employers, unions, journalists, etc. seemed to all be coming up with their own numbers and there was no agreement on what the facts actually were.  Rorty and Stone 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.  

For this project, 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 World War I in 1917 and the problems of reconstruction after 1918 distracted the attentions of many participants, but the wartime experience also highlighted the importance and necessity of good and accurate economic statistics. The fund-raising effort resumed, and the money was 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 also take that on as a secondary topic.  The finalization of organization was made during the Winter meetings of the American Economic Association in Chicago in December 1919.  The "National Bureau of Economic Research, Inc." was formally chartered and launched on January 29, 1920.  Edwin F. Gay was to serve as the NBER's first president, and Wesley C. Mitchell was to serve as its first director of research.

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".  Or as it would would later clarify, ""it seeks not only to find facts and make them known, but to determine them in such manner and under such supervision as to make its findings carry conviction to Liberal and Conservative alike."  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).  It also included representatives of the American Federation of Labor,  the National Bankers' Association, the National Industrial Conference Board,  Federation of Farm Bureaus, National Publishers' Association, Engineering Council, etc.  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 composition of the board was rearranged in 1927, and increased to 22 directors).

Research in 1920s

Mitchell's initial research staff consisted of Wilford I. King, Frederick R. Macaulay and Oswald W. Knauth. They completed the founding study on income distribution in the United States within two years. It was published as two volumes in 1921-22.  The study famously presented two independent estimates of national income - one by Knauth involving income tax returns, another by King involving census and other data.  A slimmer volume by Knauth summarizing the 1919 findings by state came out a little later.  It proved a success, and persuaded the directors that the NBER should continue. 

With the US reeling from the recession of 1920-21, Mitchell persuaded the NBER directors to take up business cycles as a second project.  This turn was helped when, in 1921, Herbert Hoover (then Harding's Secretary of Commerce) requested the NBER to provide reliable data on cyclical unemployment.  The Carnegie Corporation provided a grant to that end.  Knauth resigned in 1922 to take a job in the private sector (an updated edition of Knauth's income by states was completed by Maurice Leven in 1925).   To complete the Hoover Committee report on time, Leo Wolman and Willard L. Thorp were added to the research staff in 1922 (director T.S. Adams and a dozen other outside contributors also lent a hand to the Hoover study).  A supplement to the Hoover study's unemployment estimates by King came out in 1923. 

In 1922, another request came, this time from the National Research Council, who proposed to fund a study on immigration. To undertake that study, Harry Jerome took leave from Wisconsin and joined the NBER staff in 1923.  Jerome's study on migration was published in 1926 

Partly to deal with the expanding scope of NBER projects, Edwin F. Gay was appointed joint director of research in 1924.  Mitchell at Columbia and Gay at Harvard would serve as joint directors of research of the NBER  for the next decade.  The process of project approval was formalized shortly after.  Proposals were submitted by the directors of research to the NBER's board of directors for approval, and upon completion, nothing would go out without all the board first reading it, and voting in majority for its publication.

With the board's approval, Mitchell began his own analytical treatise on business cycles in 1924, that would would eventually appear in 1927 as Business Cycles: the problem and its setting, while Willard Thorp began collecting the relevant cycle data on seventeen countries as far back to 1890 (some earlier) that would appear as Business Annals in 1926. Tangentially related to cycles, Wolman's monumental history of labor union membership was published in 1924, but a much-announced study of bond yields and interest rates over the cycle by Frederick Macaulay, begun as early as 1923, did not seem to get past the door and would not see the light of day until fifteen years later (1938).  

The initial successes of the NBER had led to outside grants coming in to commission studies.  Even before the Jerome migration study was completed,  the NBER was asked by the NRC in 1925 to conduct two further studies on immigration, to be funded by the SSRC - one on the relationship between immigration and mechanization, another on international immigration patterns.  Jerome took up the former, while the venerable William F. Willcox (then at Cornell) agreed to take up the latter.  However, Jerome had to return to his teaching duties at Wisconsin in 1926, and continued only on a part-time basis.  Despite having his hands full, Jerome launched another project estimating hourly productivity, also financed by the SSRC grant.  The SSRC also provided a small grant for Wolman to undertake a study of the US labor market.  Of these new projects, only the first volume of Willcox's study on world migrations appeared before the end of the decade.

In 1925, the NBER directors proposed yet another area of research: the structure of prices.  Frederick C. Mills of Columbia joined the NBER staff in 1925 to undertake this, and the resulting study was published in 1927.  Mills promptly began working on his second volume on prices.  In the meantime, with his theoretical treatise nearing completion, Mitchell began to project a second volume on business cycles, to digest Thorp's mass of data.  But Thorp had resigned from full-time at the NBER after completing his annals. To replace him, Mitchell's student Simon Kuznets joined the NBER staff in 1926, to sift through the data, loosely supervised by Thorp from a distance.  Nonetheless, Thorp continued to collect data, and announced in early 1929 his intention to publish a five-volume encyclopaedia of statistical series.

Wilford I. King, charged since 1923 with undertaking a detailed study of income distribution, also much announced, also kept getting delayed.  Since Knauth's resignation, King was also responsible for updating income estimates and kept getting pestered to provide data for the periodic NBER Bulletin.  In 1926, King had to interrupt his distribution work to undertake a pilot study on philanthropic organizations on a grant from the Carnegie Corporation.  Exhausted and plagued by ill-health, King resigned from the NBER in 1927 to take up a position at NYU, leaving only the monograph on philanthropy to be published by the NBER in 1928. King's remaining work for the NBER would have to be primarily completed through assistants.  

In late 1927, the Hoover Committee hit up the NBER again, requesting a survey of recent changes in the US economy since 1922.  The massive study  involved contributions from NBER staff and authors outside the NBER, supervised by Hoover committee secretary E.E. Hunt.  (Hoover himself resigned the committee half-way through to run for president; A.W. Shaw chaired the committee thereafter).  The study was finally completed in February 1929  and published in two volumes that May.  Wolman, Thorp, Mills and King (via Copeland) offered chapters based on their impending work.  It offered a comprehensive snapshot of the US economy up to the eve of the Great Depression.


1930 finally saw the publication of W.I. King's study on income, effectively updating the 1921-22 study.The NBER put out a periodic Bulletin until 1940, when it was replaced by the "Occasional Paper" series.  Its early crop of researchers included Wilford I. King, F.C. Macalay and Leo Wolman.  NBER stalwarts Frederick C. Mills and Simon Kuznets joined the NBER shortly after, Arthur F. Burns joined the research staff in 1933

(to be completed)




Directors of Research at the NBER



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Resources on the NBER

  • NBER website
  • "Notice of NBER, AEA conference, December 1919", 1920, AEA Papers and Proceeedings, p.228
  • "The National Bureau of Economic Research, Inc. - Report to the AEA, December 1920", 1921, AEA Papers & Proceedings, (May), p.180
  • "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
  • Famous NBER Studies:
    • 1920s
    • (No.1 & 2) Income in the United States: Its Amount and Distribution, 1909-1919,  by W.C. Mitchell, W.I. King, F.R. Macaulay and O.W. Knauth, 1922, Vol. 1: Summary [nber], Vol. II - Detailed Report [nber]
    • (No.3) Report of Income by States in 1919, by Oswald W. Knauth 1922 [nber]
    • (No.4) Business Cycles and Unemployment, (Hoover Committee report), 1923 [nber]
    • (No.5) Employment Hours and Earnings in Prosperity and Depression, United States, 1920-1922, by W.I. King, 1923 [nber]
    • (No.6) The Growth of American Trade Unions 1880-1923, by Leo Wolman, 1924 [nber]
    • (No.7) Income in the Various States, its sources and distribution in 1919, 1920, 1921 by Maurice Leven, 1925 [nber]
    • (No.8) Business Annals, by Willard L. Thorp, 1926 [nber]
    • (No.9) Migration and Business Cycles by Harry Jerome, 1926 [nber]
    • (No. 10) Business Cycles: The problem and its setting, by Wesley C. Mitchell, 1927. [nber]
    • (No. 11) The Behavior of Prices, by Frederick C. Mills, 1927 [nber]
    • (No. 12) Trends in Philanthropy by Willard I. King, 1928 [nber]
    • (No. 13) Recent Economic Changes in the United States, 1929 vol. 1 & 2 [nber]
    • (No. 14) International Migrations, vol. 1 by Walter F. Willcox, 1929 [nber]
    • (No. 15) National Income and Purchasing Power, by Willard I. King, 1930 [nber]
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  • NBER annual reports from the Director of Research
    • (Director W.C. Mitchell, 1920-1924)
    • Annual Report for 1920, 1921, [nber]
    • Annual Report for 1921, 1922 [nber] (recommending business cycles)
    • Annual Report for 1922, 1923 [nber]
    • Annual Report for 1923, 1924 [nber]
    • (Directors W.C. Mitchell and E.F. Gay, joint 1925-1933)
    • Annual Report for 1924, 1925 [nber]
    • Annual Report for 1925, 1926 [nber]
    • Annual Report for 1926, 1927 [nber]
    • Extending the Frontier of Economic Science: Annual Report for 1927, 1928 [nber]
    • Annual Report for 1928, 1929 [nber]
    • Annual Report for 1929, 1930 [nber]
    • Annual Report for 1930, 1931 [nber]  (incl. address of president Harry W. Laidler)
    • Annual Report for 1931, 1932 [nber] (incl. address of president Oliver W. Knauth)
    • Annual Report for 1932, 1933 [nber]  (")
    • (Director W.C. Mitchell, 1934-x)
    • Annual Report for 1933, 1934 [nber] (Joseph H. Willits, president)
    • Annual Report for 1934, 1935 [nber]
    • Annual Report for 1935, 1936 [nber]
    • Annual Report for 1936, 1937 [nber]
    • Annual Report for 1937, 1938 [nber]
    • Annual Report for 1938, 1939 [nber]
    • Annual Report for 1939, 1940 [nber]
    • Annual Report for 1940, 1941 [nber]
    • Annual Report for 1941, 1942 [nber]
    • Annual Report for 1942, 1943 [nber]
    • Annual Report for 1943, 1944 [nber]
    • Annual Report for 1944, 1945 [nber]
    • Annual Report for 1945, 1946 [nber]
    • Annual Report for 1946, 1947 [nber]
    • Annual Report for 1947, 1948 [nber]
    • Annual Report for 1948, 1949 [nber]
    • Annual Report for 1949, 1950 [nber]
    • (Director Solomon Fabricant, 1953-1965)
    • 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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