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Who Decides If the US Is in a Recession? Eight White Economists You’ve Never Heard Of

Prominent Wall Street economists like Mark Zandi, investing luminaries like ARK Invest’s Cathie Wood and executives like JP Morgan Chase CEO Jamie Dimon can make recession predictions until they’re blue in the face, but their guidance will remain just that — an economic forecast.

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.


With so much focus on the state of the economy, and so many official sources looking to one group to determine whether the United States has entered a downturn, NBER has an outsized role influencing American politics, policy and financial decision-makers.

“There’s an awful lot of symbolic value attached to whether we’re in a recession,” said Richard Wolff, professor of economics emeritus at the University of Massachusetts, Amherst. {snip}


In recent years, however, critics have said the NBER’s recession and expansion determinations fail to consider the economic state of many underrepresented Americans.


The NBER says the last recession ended in April 2020 but the recovery was two-pronged, something that the Department of Labor designated as “K-shaped”: sharp growth for the affluent and stagnant for the less well-off.


Low-wage workers, the Department of Labor concluded, would likely feel the impact of long-term earnings reductions, weakened savings and increased inequality for years to come.

When economists and policymakers look to study previous recessions, they will be using dates that “don’t necessarily represent the full breadth of experiences in this country,” said Valerie Wilson, who is director of the Economic Policy Institute’s Program on Race, Ethnicity, and the Economy as well as president of the National Economic Association. “More diversity on the committee will bring in perspectives and other ideas about how we understand the health of the economy.”

In recent years there has been a push by policymakers and the Biden administration to include more diverse thinking in economic analysis.

Janet Yellen, America’s first woman Treasury secretary and its first woman Fed chair, has argued that the lack of women and minority economists at the Federal Reserve and the federal government is a top priority. That lack of diversity, she said, skews viewpoints and limits the issues of discussion.


The NBER doesn’t have to contend with public attention the way the federal government does, so it’s a much more insular community. Those outside of that community know very little about its inner workings, said Wilson — and those who do push back are “extremely underrepresented minorities who have less power.”

“I think the economics profession is notorious for being one of the least-diverse professions or disciplines along a number of lines: racial, gender and diversity in schools of thought,” added Wilson.


“Fundamental issues that ought to be part of the conversation in our economic system are excluded as if they don’t exist,” said Wolff. “You have a community of old, White graduates from the same elite institutions and what they think is important is important. If you think differently, you’re out of the club.”