Who decides if the US is in a recession? Eight economists you’ve never heard of – CNN

by | Jun 30, 2022 | Financial

That’s because, in the United States, the economy isn’t broadly and officially considered to be in a recession until a relatively unknown group of eight economists says so.The economists, who serve together as the Business Cycle Dating Committee, are hand-selected by and work under the umbrella of the National Bureau of Economic Research (NBER), a private nonprofit organization. They have no predetermined meeting dates and their deliberations are private. There are no fixed term dates and the final determination of who gets to serve on the committee is made by one man: NBER president and Massachusetts Institute of Technology economist James Poterba. There is a clear lack of racial diversity amongst the eight members, and NBER has never had a member who has been a racial minority, according to Gary Hoover, co-chair of the American Economic Association Committee on the Status of Minority Groups in the Economics Profession.All NBER members are experts in macroeconomics and business cycle research. Each is over 60 years old, and they are all associated with prestigious universities. The group includes two women, one of whom is married to another member. The NBER’s recession designations are used and accepted exclusively by the US government, businesses, investors and journalists.I shall not attempt to define recession, but I know it when I see itWhile a recession is commonly defined by two consecutive negative quarters of gross domestic product growth, there’s no steadfast rule governing what defines a recession in the United States.Instead, the Dating Committee abides by a relatively vague definition that allows for wiggle room: A recession, they write, “involves a significant decline in economic activity that is spread across the economy and lasts more than a few months.” The committee also takes its time in defining when a recession begins and ends, making sure to look at data on a broad timeline. The designations often come retroactively — which means the US could currently be in the middle of a recession wi …

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