Does the NBER place enough emphasis on employment in its dating of business cycles?
Geoffrey Moore, who was ECRI’s founder, was the dating committee of the NBER until 1979. He used to joke that he had lunch with himself to date the business cycles. In 1979, they made a true committee and Geoffrey was the senior person on that committee until he passed away in 2000. ECRI continues to monitor the dating of business cycles, and we agree with the dates the NBER has picked through the December 2007 peak. We verified it, and it is an accurate date based on a classic definition, which includes GDP growth and jobs supplemented by sales and income, with equal weighting of growth and jobs. There is a real risk going forward that there will be a shift in the dating committee of the NBER to one that places less weight on employment. It’s not something that is necessarily related to current events. People obviously have different backgrounds in terms of their knowledge. When I look at the committee, it is shifting more toward a model-based approach that puts heavier weight on prod
