National Bureau Of Economic Research Essay

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The National Bureau of Economic Research (NBER) was founded in 1920. The NBER is the nation’s leading nonprofit economic research organization. It is governed by a Board of Directors whose representatives are from the leading U.S. research universities and major national economics organizations. Our textbook defines recession as “a decrease in real GDP that lasts for at least two quarters (six months).” This definition, however, is merely the tip of the iceberg. The NBER’s Business Cycle Dating Committee maintains a chronology of the U.S. business cycle. The research distinguishes the dates of peaks and troughs that frame economic recession or expansion. The period from a peak to a trough is a recession and the period from a trough to a peak…show more content…
This marked the end of an expansion and the beginning of a recession. The expansion began in March 1991, lasting ten years. The committee emphasizes economy-wide measures of economic activity. The committee is to maintain a monthly chronology, so the committee uses almost only monthly indicators. Real GDP is only measured quarterly so the committee gives only slight importance to it. There are four indicators that are considered important measures by the NBER. The committee places particular emphasis on two monthly measures of activity across the entire economy: 1) personal income minus transfer payments and 2) employment. Also, the committee studies two indicators with covered of manufacturing and goods: the volume of manufacturing and trade sectors and industrial production. A recession involves a large decline in output and employment. According to the NBER, in the past 6 recessions, industrial production fell by an average of 4.6 percent and employment by 1.1 percent. The Bureau waits to declare that a turning point in the economy is a true peak leading to a recession until the data show whether or not a decline is large enough to qualify as a
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