The Treasury Secretary decries the "simple-minded" two quarters definition of a recession, cites the the National Bureau of Economic Research as the official arbiter.
George Schultz in 1974.
A short & incomplete history of recession calling.
nytimes.com
George Schultz in 1974.
A short & incomplete history of recession calling.
nytimes.com
In 1990 the Fed, supported by the Administration, were more focused on fighting inflation and downplayed recession fears, pointing to the National Bureau of Economic Research definition. nytimes.com
(Note: In both of those cases the NBER eventually decided that the economy had been in recession during those periods. FWIW, the unemployment rate had risen 0.5pp in 3 months when Schultz spoke and 0.5pp in 2 months in the 1990 case, today it has been flat.)
The NBER was viewed as the arbiter of recessions long before Schultz and Greenspan invoked it in the 1970s and 1990s.
This from 1967: "The National Bureau's reference dates have been accepted for some time as authoritative by the government." timesmachine.nytimes.com
This from 1967: "The National Bureau's reference dates have been accepted for some time as authoritative by the government." timesmachine.nytimes.com
This article quotes the key NBER business cycle dater Geoffrey Moore: "the data is of a recessionary sort". Interestingly the article does not cite GNP (the most recent quarters were then reported to be +3.7% and +4.6%) but instead a set of monthly indicators identified by Moore.
(Moore's March 1967 was prescient based on the available data. The government's first report of GNP growth for 1967-Q1 was 0.0%. In the following release it was revised down to -0.3%.
Years later 1967-Q1 GNP was revised up to 3.5%.
It was never declared a recession.)
Years later 1967-Q1 GNP was revised up to 3.5%.
It was never declared a recession.)
As far as I can tell the New York Times generally (perhaps always) waited until the NBER called it before they started calling it a recession, but would talk about, for example, "Signs of a Recession".
This was in April 1980. timesmachine.nytimes.com
This was in April 1980. timesmachine.nytimes.com
And in June 1980 the NBER called it (said it started in January)--and was headlined in the NYT.
The article notes: βThe bureauβs pronouncements on economic cycles have become doctrine, and are widely used by Government officials, academics and others.β
timesmachine.nytimes.com
The article notes: βThe bureauβs pronouncements on economic cycles have become doctrine, and are widely used by Government officials, academics and others.β
timesmachine.nytimes.com
Today's New York Times headlines "fear of recession."
Will it turn out to be like the January 1967 false alarm or the April 1980 correct premonition?
The data will likely become clearer. And eventually the NBER will tell us for sure. nytimes.com
Will it turn out to be like the January 1967 false alarm or the April 1980 correct premonition?
The data will likely become clearer. And eventually the NBER will tell us for sure. nytimes.com
P.S. I have not seen direct confirmation but appears that the NBER defn was standard until 1967 when it looked like the NBER was going to call a recession based on monthly data (see above). For political reasons Prez Johnson/Okun pushed the 2 quarter one. econsphdtutor.wordpress.com
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