GDP reached a peak in the fourth quarter of This was followed by contraction during the first three quarters of and growth since then.
In the fourth quarter of , real GDP surpassed the earlier peak. This performance of real GDP is consistent with the other data considered by the committee. Output fell less than employment during the recession and currently is rising faster than employment because of unusual productivity growth. For more information, see the FAQs at the end of this memo, and also see http: Files containing the data and figures is available from that page as well. Suppose that the current weakness of the economy continues, contrary to current forecasts.
How will the NBER decide about turning points? The first step will be to determine if the period of weakness that began in late amounts to a recession. In this determination, we would refer to our standard criteria of depth, duration, and dispersion. The definition of a recession is stated in the third paragraph of this memo. The second step would be to determine if the recession starting in late was a continuation of the recession that we have already determined began in March We would decide in favor of a single, longer recession if we determined that economic activity in the period from March through late never surpassed its peak in March Here, we would have to reconcile the conflicting behavior of output and employment.
The NBERs Recession Dating Procedure
Output surpassed its previous peak in late , while employment rose only slightly from its lowest level of April to the highest level it reached in , in August. At that time, employment was still 1. The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP.
How does that relate to the NBER's recession dating procedure? Most of the recessions identified by our procedures do consist of two or more quarters of declining real GDP, but not all of them. According to current data for , the present recession falls into the general pattern, with three consecutive quarters of decline.
Our procedure differs from the two-quarter rule in a number of ways.
First, we use monthly indicators to arrive at a monthly chronology. Second, we use indicators subject to much less frequent revision. Third, we consider the depth of the decline in economic activity. Recall that our definition includes the phrase, "a significant decline in activity.
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Some observers, however, cite April as the start of the recession, reasoning that if the peak ended in March, then the recession began in April. The exact peak occurred sometime in March. For the rest of the days in March, the economy was in recession. So the expansion ended and the recession began in March.
Isn't a recession a period of diminished economic activity? It's more accurate to say that a recession-the way we use the word-is a period of diminishing activity rather than diminished activity.
National Bureau of Economic Research
We identify a month when the economy reached a peak of activity and a later month when the economy reached a trough. The time in between is a recession, a period when the economy is contracting. The following period is an expansion. Economic activity is below normal or diminished for some part of the recession and for some part of the following expansion as well.
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Some call the period of diminished activity a slump. Following the precedents established in many decades of maintaining its business cycle chronology, the NBER considers employment, production, sales, and real income. When special factors-such as unusual productivity growth and favorable shifts in the terms of trade-make income and production-based measures move differently from those based on employment, we balance the two types of evidence.
You emphasize the payroll survey as a source for data on economy-wide employment. What about the household survey? The NBER was founded in Its first staff economist, director of research, and one of its founders was American economist Wesley Mitchell. He was succeeded by Malcolm C. In the early s, Kuznets' work on national income became the basis of official measurements of GNP and other related indices of economic activity. The NBER's research activities are mostly identified by 20 research programs on different subjects and 14 working groups.
The research programs are: The authors address one occurring problem with theses tests: Teacher and parent referrals would be acknowledged by comprehensive screening programs being introduced into school districts today. The screening tests that school districts are beginning to implement test students on a variety of characteristics to see whether or not they would qualify and succeed in gifted education programs.
One issue that the new screening tests would fix compared to the older referrals is that non-English speaking students are overlooked because of a lack of parental referrals due to language barriers. When these tests were implemented on a small scale the statistics showed an increase in Hispanic students by percent, and the number of black students increased by 80 percent. These statistics indicate that there are little to no consequences for minorities when these tests that are being implemented. In conclusion the authors suggest that the issues found in gifted educational programs can be fixed by comprehensive screenings.
The National Bureau of Economic Research uses the term "gains" to reflect improvement in racial convergence. 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. 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.
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. The NBER identifies months and quarters of turning points without designating a date within the period that turning points occurred.
The dummy variable adopts an arbitrary convention that the turning point occurred at a specific date within the period. A value of 1 is a recessionary period, while a value of 0 is an expansionary period. For this time series, the recession begins the first day of the period following a peak and ends on the last day of the period of the trough.
For more options on recession shading, see the notes and links below. The recession shading data that we provide initially comes from the source as a list of dates that are either an economic peak or trough. We interpret dates into recession shading data using one of three arbitrary methods. All of our recession shading data is available using all three interpretations.
National Bureau of Economic Research - Wikipedia
The period between a peak and trough is always shaded as a recession. The peak and trough are collectively extrema. Depending on the application, the extrema, both individually and collectively, may be included in the recession period in whole or in part. In situations where a portion of a period is included in the recession, the whole period is deemed to be included in the recession period. The first interpretation, known as the midpoint method, is to show a recession from the midpoint of the peak through the midpoint of the trough for monthly and quarterly data.