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NBER and the Evolution of Economic Research, 1920-2020

Paper Session

Friday, Jan. 3, 2020 2:30 PM - 4:30 PM (PDT)

Marriott Marquis, San Diego Ballroom B
Hosted By: American Economic Association
  • Chair: James Poterba, Massachusetts Institute of Technology and NBER

NBER Business Cycle Dating: Retrospect and Prospect

Christina Romer
,
University of California-Berkeley
David Romer
,
University of California-Berkeley

Abstract

Almost since its inception, the NBER has been the quasi-official arbiter of the dates of business cycle expansions and recessions. This paper examines the past contributions and future prospects of this business cycle dating. Perhaps the most fundamental contribution has been to identify substantial short-run fluctuations as a key feature of the economy. In this way, business cycle dating led naturally to the NBER’s (and the economic profession’s) century-long focus on the causes, nature, and consequences of recessions. But the fact that the dating is valuable does not mean it cannot be improved. We show that the definitions and criteria used by the NBER in dating recessions have undergone continual evolution over its history. Our most substantial proposal is that the NBER continue this evolution by modifying its definition of a recession to emphasize increases in economic slack rather than declines in economic activity. We also discuss both possible revisions to business cycle dates from the Great Depression to the present and the possibility of making dating more mechanical. Finally, we argue that the large inconsistencies between pre-Depression business cycle dates and later ones call for either major revisions to the earlier dates or treating the earlier and later dates as distinct series.

National Income and Economic Measurement

Hugh Rockoff
,
Rutgers University

Abstract

Founded in 1920, the NBER began life as an attempt to bring together the best economic minds of the day and provide them with adequate resources to produce unbiased and accurate estimates of national income and related variables. The economists at the NBER including Wesley Clair Mitchell, the first director of research, and Simon Kuznets identified and in many cases solved a wide range of theoretical and empirical challenges. Their estimates proved valuable in addressing contemporary concerns over the distribution of income and the disruptions produced by the world wars and Great Depression. Eventually the work of producing these statistics was turned over to the federal government, but the NBER continued to play an important role as critic. In this paper I trace the evolution of NBER’s work in this area and discuss some of the main problems that were wrestled with by researchers at the NBER that remain unsolved.

Monetary Economics at the NBER

Emi Nakamura
,
University of California-Berkeley
Jon Steinsson
,
University of California-Berkeley

Abstract

This paper examines lasting contributions to research on monetary economics at the NBER. Milton Friedman and Anna Schwartz' Monetary History of the United States and related work on monetary statistics stands out as particularly important. This work dramatically altered the profession's understanding of the Great Depression and the role of money in economic fluctuations. More recently, the NBER has played an important role in the development of the currently prevailing paradigm for monetary analysis.

The Incubator of Human Capital Research

Claudia Goldin
,
Harvard University
Lawrence Katz
,
Harvard University

Abstract

The field of human capital was not invented by NBER researchers, but it was nurtured and expanded there. We explore how the NBER was an incubator for human capital research and the manner in which it altered the field of labor economics and economics more generally.
Discussant(s)
Robert Hall
,
Stanford University
Katharine G. Abraham
,
University of Maryland
Michael Bordo
,
Rutgers University
James J. Heckman
,
University of Chicago
JEL Classifications
  • B2 - History of Economic Thought since 1925
  • E3 - Prices, Business Fluctuations, and Cycles