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Who decides if the United States is in recession? Eight economists I've never heard of

This is not considered widely and officially in recession in the United States until a group of eight relatively unknown economists say so. Because. The economists who work together as the

Business Cycle Dating Committee, have been carefully selected by the National Bureau of Economic Research (NBER) and work under it. ), Private non-profit organization. There is no pre-determined meeting date and their deliberations are private. There is no fixed term, and the final decision on who will be a member of the committee will be made by one of NBER's president and economist at the Massachusetts Institute of Technology, James Poterva.

There is a clear lack of racial diversity among the eight members who are experts in macroeconomics and business cycle research. Each has a history of over 60 years and is all associated with prestigious universities. This group contains two women, one of whom is married to another member.

NBER's recession designation is used and accepted exclusively by the US government, businesses, investors and journalists.

I don't try to define a depression, but you can see it

A depression is usually the sum of two consecutive negative quarters. As for domestic product growth, there are no firm rules governing what defines the US recession.

Instead, the Dating Commission follows a relatively vague definition that allows for wiggle rooms. It will last for more than a few months. "

The Commission also takes the time to define when the recession begins and ends, and makes sure that the data is reviewed over a wide timeline. The designation is often retroactive. That is, the United States may now be in the midst of a recession without officially admitting it until after the fact.

For example, inflation was at its highest level in 40 years, the US economy shrank in the first quarter of the year, and the stock market was at stake for the worst six months since 1932. Consumer sentiment is plummeting. However, there is no guidance on when the Commission will meet next and what they will decide. The

group states that it is considering a wide range of economic indicators. Actual personal income minus transfer, non-farm salary employment, actual personal consumption expenditure, wholesale retail sales adjusted for price fluctuations, employment measured in household surveys, mining and industrial production. However, there are no set rules as to which scales they use in their process or how they are weighted in the decisions of the Commission.

For example, the short-term recession caused by Covid in 2020 had only a quarter of the negative growth of. However, "the Commission should classify the recession as a recession, even if it proves to be very short, because the subsequent decline in activity was so great that it was widespread throughout the economy. We conclude that there is. "

A lot of official information that is very focused on the state of the economy and is looking at one group to determine if the United States has fallen into a recession. By source, NBER plays a major role in influencing US politics, policy and financial decisions. -Manufacturer.

"Whether we are in a recession has so many symbolic values," said Richard Wolff, Professor of Economics at the University of Massachusetts Amherst. .. "It's taken seriously on the hill and is important by policy makers across the country."

But Wolff, even professional economists, comes from where the official recession designation comes from. I found that I didn't know Gospel — The judgment seems to be just going down from a high place.

However, in recent years, critics have stated that NBER's recession and expansion decisions do not take into account the economic conditions of many undervalued Americans.

Lack of inclusion

NBER states that the last recession ended inApril 2020, but there are two recovery. It was the side. Labor force designated as "K-shaped": Rapid growth for the wealthy and stagnant for the non-wealthy.

"Analysis of personal data from a variety of sources seems to support the brunt of the recession caused by pandemics," they wrote. ..

The Ministry of Labor says that workers over $ 60,000 have returned to pre-pandemic employment levels by August 2020, but low-wage workers' employment levels are still down by about 40%. I found.

The Ministry of Labor has concluded that low-wage workers are likely to experience the effects of long-term declines in profits, weakened savings and increased inequality over the next few years.

When economists and policy makers try to study the previous recession, they will use dates that "do not necessarily represent the full extent of their experience in this country," economic policy. Valerie Wilson, director of the Institute, said race, ethnicity, economic programs, and president of the National Economic Association. “The increased diversity of the Commission gives us perspectives and other ideas on how to understand the health of the economy.”

In recent years, policy makers and the Biden administration have been , Demands that economic analysis include diverse ideas.

Janet Yellen, America's first female finance minister and first female federal chairman, said thatthe lack of women and minority economists in federal reserves and governments is a top priority. Claimed to be a matter. She said that lack of diversity distorts the perspective and limits the issue of discussion. The increased scrutiny and debate about the

representative focuses on the Federal Preparatory Board, where Lisa Cook became the first black woman to serve last month. However, NBER, a private institution funded by the government and working closely with former, future and current government officials, has largely avoided criticism.

Wilson said more focus should be placed on organizations that "make important policy decisions." "They should look beyond the top line numbers," she said.

Economist Diversity Issues

NBER is a much more isolated community because it doesn't need to get the public attention like the federal government. According to Wilson, people outside the community know little about its internal mechanics. And those who push back are "weak, very undervalued minorities."

"I think economics professionals are famous for being one of the least diverse professions or disciplines in a variety of disciplines, such as race, gender, and diversity of thought schools. "Wilson added.

It's difficult to break through and get people to consider new frameworks on how to understand inequality and inequality. This creates an unbreakable cycle, as renowned economists lead the editorial board of peer-reviewed journals. Being published in these journals is essential for getting a tenure at a university employed by an organization like the government or NBER.

Wolff, an undergraduate student at Harvard University, said, "It's incest," got a master's degree at Stanford, a doctoral degree in economics at Yale, andJellen's. I was a classmate.

"The basic issues that should be part of the conversation in our economic system are ruled out as if they didn't exist," Wolff said. "You have an old white community that has graduated from the same elite institution, and it's important that they think it's important. If you think differently, you're out of the club."

Wolf Said he benefited greatly from being a charming economist's inner "poster boy", which he calls the Old Boy Network, but "unless someone says the emperor is naked.

NBER declined to comment on the diversity of economists, but confirmed that the current member of the Business Cycle Dating Commission is Robert Hall of Stanford University. .. Robert J. Gordon of Northwestern University; James Poterba of MIT; Valerie Ramie of California University San Diego. Christina Romer of the University of California, Berkeley. David Romer at the University of California Berkeley; James Stock at Harvard University; Mark W. Watson at Princeton University.