Business cycle dating nber

Prior studies have concluded black gains in AFQT and NAEP scores in the early s, black gains in college enrollment in the mids, and black gains in earnings throughout the s. It is concluded that black gains were centered among cohorts of blacks born in the South during the s and 70s; therefore, not only is the study geographically exclusive, but data is also inconsistent with the contemporary causes in the s and s.

These results would rather be indicating that black gains in the s were influenced by the Civil Rights and War on Poverty periods 25—30 years before the s. With response to the education gap, new findings show that the cross-cohort gains in college enrollment only pertained to blacks born in the South there were no relative gains for black in the North. New findings also show that gains in relative earnings are limited to blacks born in the to cohorts ages 28—35 in and show no gains for other age groups.

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To conclude, the findings of this updated study indicate that racial gains are due primarily in part to birth date and birthplace. The first study in the article concluded that the best way to eliminate racial inequality in the future, specifically with income inequality, would be to provide black and white students with the same skills.


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The next study indicates that white children show a higher level of education than black students as young as two years old. Possible explanations for this are that the older children are tested differently than younger children, which could have more to do with what the child has observed throughout the years than what they are innately capable of, that there are racial differences in the rates in which children develop, and that genes and environmental influences also come into play.

The third study demonstrates that the inherent deviation in education in children before they enter school depends on their parental environment. Similarly, the fourth study concludes that intervention programs before children enter schools still need a lot of work and are beneficial in some ways, but ultimately do not close the gap in education between black and white students. However, the next study about exclusively high school students shows that eighth grade test scores specifically play a key role in the growing gap between high school students and their graduation rates.

The seventh study analyzes the effect of intervention programs on students once they have entered school, and indicates that improvement within schools and teaching alone can positively affect the achievement of black students and make them more comparable to that of white students. The entire NBER article ultimately concludes that we still do not know how to close the achievement gap because of the present color line, but there are certainly ways to increase individual student achievement that may eventually make schools more productive overall.

Using data from the University of North Carolina system, which encompasses all public colleges in the state, the study looks at racial inequality at the collegiate level in regards to enrollment, completion, and various achievements, and the causation of such inequity.

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The study also mentions historically black colleges in North Carolina, and briefly questions whether they remain a positive contribution in contemporary America, arguing that they were a reaction to Jim Crow laws and tend to isolate African-American students from other racial groups. Controlling for test scores, majors, and other scholastic factors, the study looks at administrative data from North Carolina K public schools of eighth graders both in and , categorized both by race and socioeconomic standing.

It then tracks these students through their expected graduation dates of both high school and college, given they continued to a North Carolina university, and they examined whatever racial stratification occurred within those time periods based on enrollment and graduation rates at each university. The study found that African-Americans in the North Carolina public school system are greatly disadvantaged. In one group, controlling for gender, the study found that, of the eighth graders, African-American students were 4.

In one study, the NBER was ranked as the second most influential domestic economic policy think tank the first was the Brookings Institution. The NBER uses a broader definition of a recession than commonly appears in the media. A definition of a recession commonly used in the media is two consecutive quarters of a shrinking gross domestic product GDP.

In contrast, the NBER defines a recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. Typically, these dates correspond to peaks and troughs in real GDP, although not always so. The NBER prefers this method for a variety of reasons.

First, they feel by measuring a wide range of economic factors, rather than just GDP, a more accurate assessment of the health of an economy can be gained. Second, since the NBER wishes to measure the duration of economic expansion and recession at a fine grain, they place emphasis on monthly—rather than quarterly—economic indicators. Finally, by using a looser definition, they can take into account the depth of decline in economic activity. For example, the NBER may declare not a recession simply because of two quarters of very slight negative growth, but rather an economic stagnation.

The subjectivity of the determination has led to criticism and accusations committee members can "play politics" in their determinations. Though not listed by the NBER, another factor in favor of this alternate definition is that a long term economic contraction may not always have two consecutive quarters of negative growth, as was the case in the recession following the bursting of the dot-com bubble. Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

The trough marks the end of the declining phase and the start of the rising phase of the business cycle. From Wikipedia, the free encyclopedia. This article is about the research organization. For the railroad, see Nittany and Bald Eagle Railroad. American private nonprofit research organization.

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Shiller Alvin E. Prescott Finn Kydland Robert F. Heckman Daniel L. What one wants to know is why things are falling. To explain a phenomenon, one needs to trace the primary causes that gave rise to it. The main reason why the NBER's definition is confined to describing manifestations rather than the underlying causes of a recession is because mainstream thinkers do not hold that such causes can be known.

They are of the view that the sources of recessions are various random shocks emanating from various factors such as a sudden change in people's psychology or various unexpected political and other events. In short, these causes are of an unexpected nature. If the causes of recessions are unexpected, we suggest that there is no way that one could even make an intelligent guess regarding the future course of the economy. From this perspective, the information that the NBER provides is not of much use to businessmen. The information that the economy has been in a recovery phase since June last year is not of much value if there is a constant threat that a sudden random shock could produce another severe economic slump.

After all, what a businessman wants to know is where the economy is heading. However, without a well-articulated knowledge of the underlying driving forces it is not possible to provide a meaningful answer to this question. Even the information regarding the average duration of expansion as identified by the NBER is of little help given the wide variation of this average — the average between and stood at 42 months; between and it was 27 months; between and it stood at 35 months and between and at 59 months.

Now, in a free unhampered environment we could envisage that the economy would be subject to various shocks, but it is difficult to envisage a phenomenon of recurrent boom-bust cycles. Before the Industrial Revolution in approximately the late 18th century, there were no regularly recurring booms and depressions.

There would be a sudden economic crisis whenever some king made war or confiscated the property of his subjects; but there was no sign of the peculiarly modern phenomena of general and fairly regular swings in business fortunes, of expansions and contractions. The boom-bust cycle phenomenon is somehow linked to the modern world.

But what is the link? Careful examination of this would reveal that the link is in fact the modern banking system, which is coordinated by the central bank. The source of recessions turns out to be the alleged "protector" of the economy — the central bank itself. Further investigation would show that the phenomenon of recessions is not about the weakness of the economy, as such as the NBER and most economists present, but about the liquidation of various activities that sprang up on the back of the loose monetary policies of the central bank.

For the NBER economists as well as other economic experts the so-called economy is discussed in terms of real GDP, which we suggest is likely to lead to erroneous conclusions. Now, real GDP supposedly depicts the total of final real goods and services produced. But can such a total be calculated? To calculate a total, several things must be added together. To add things together, they must have some unit in common.

Euro Area Business Cycle Dating Committee

It is, however, not possible to add refrigerators to cars and shirts to obtain the total of final goods. Since total real output cannot be defined in a meaningful way, obviously it cannot be quantified. To overcome this problem economists employ total monetary expenditure on goods, which they divide by an average price of those goods.

But is the calculation of an average price possible? Suppose two transactions are conducted. In order to calculate the average price, we must add these two ratios and divide them by two. Since GDP is expressed in dollar terms, which is deflated by a dubious price deflator, there is a high likelihood that the fluctuations of so-called real GDP will be driven by fluctuations in the amount of dollars pumped into the economy. Hence various statements by most economists regarding the rate of growth of the real economy are nothing more than a reflection of fluctuations in the money-supply rate of growth and has nothing to do with true real growth, which cannot be quantified.

Once a recession is assessed in terms of real GDP it is not surprising that the central bank appears to be able to counter the recessionary effects that emerge. For instance, by pushing more money into the economy, the central bank's actions appear to be effective, because real GDP will show a positive response to this pumping after a time lag. Conversely, once the central bank tightens its stance and slows the pace of monetary pumping, the so-called economy in terms of real GDP follows suit — a recession is set in motion.

Because fluctuations in real GDP are a reflection of fluctuations in money supply, we suggest that, contrary to popular thinking, an increase in the rate of growth of real GDP should be seen as reflecting economic impoverishment rather than economic growth. Conversely, a fall in the rate of growth of real GDP could be seen as a reflection of less pressure on the wealth-formation process and hence should be seen as positive for economic growth. Why is this so? Note that a loose central-bank monetary policy sets in motion an exchange of nothing for something, which amounts to a diversion of real wealth from wealth-generating activities to non-wealth-generating activities.

In the process, this diversion weakens wealth generators and this in turn weakens their ability to grow the overall pool of real wealth. Observe that loose monetary policy after a time lag follows by a strengthening in the rate of growth of real GDP and a weakening in the process of real wealth formation.

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Hence again, contrary to popular thinking, what we have here is not a strengthening but a weakening of the economy. In this sense the expansion in the activities that sprang up on the back of loose monetary policy is associated with what is labeled as an economic "boom," which is in fact false economic prosperity that leads to economic impoverishment. Once the central bank tightens its monetary stance, this slows down the pace of monetary pumping and after a time lag slows down the rate of growth of real GDP.