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Tuesday, November 27, 2007

NBER Recession Dating: Time for a Meeting?

Robert Hall says the NBER Business Cycle Dating Committee hasn't scheduled a meeting yet, but that could change. Justin Fox has the details:

Economist Robert Hall sees "dark clouds," but don't go expecting him to declare a recession anytime soon, Curious Capitalist: With all the recent talk of a looming recession, I figured I ought to check in with Stanford economist Robert Hall, chairman of the Business-Cycle Dating Committee of the National Bureau of Economic Research, the semi-official arbiter of when recessions start and end. I e-mailed:

When everybody starts talking recession, as is this case now, what do you folks on the Business-Cycle Dating Committee do? Schedule a meeting in Cancun? Set up a conference call? Start sending around lots of e-mails? Deputize somebody to keep an especially close eye on incoming economic data? (I just imagine there must be some form of heightened activity, and I’m curious as to what form it takes.)

He responded:

We all follow developments pretty closely. Now that Larry Summers has scooped us, all the more so.

The process begins with emails. We don't usually have a conference call until we are quite convinced that a turning point has occurred. Thus the subject of the call is not whether the recession has begun or ended, but rather when that event occurred. Consequently, the call occurs long after it is generally recognized that a turning point has occurred. There is usually a period of 6 months or so when the financial press excoriates us for tardy action.

We don't generally have a physical meeting, though we do if the time for action happens to coincide with the annual meetings of the American Economic Association at the beginning of January. So far there has been no suggestion of a meeting when that happens in 6 weeks, but things could change.

I can certainly add as an individual member, now not speaking as chair, that I see some dark clouds. The high levels of consumption seen in the past decade may decline to something closer to normal. The relation of the consumption bulge to the house-price boom is still unclear, but it would not be a surprise to see the two variables return to normal together.

The Business-Cycle Dating Committee ... was set up by ... Marty Feldstein after he took over as president of the NBER in 1977. Before that, veteran NBER staffer Geoffrey H. Moore (he'd been there since 1939) had more or less singlehandedly determined what was a recession and what was not. Feldstein decided such work was better done by a committee. ...

Justin's post has a little more on the dating procedure, and there's even more here along with a set of FAQs . Here is the list of past recession dates.

Are we talking ourselves into a recession?

    Posted by on Tuesday, November 27, 2007 at 04:05 PM in Economics | Permalink  TrackBack (0)  Comments (6)

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