Solomon Fabricant

English

Research Papers in Economics

This PDF is a selection from an out-of-print volume from the National Bureau of Economic
Research
Volume Title: Tested Knowledge Of Business Cycles
Volume Author/Editor:
Volume Publisher:
Volume URL: http://www.nber.org/books/unkn62-2
Publication Date: 1962
Chapter Title: The National Bureau's Forty-Second Year
Chapter Author: Solomon Fabricant
Chapter URL: http://www.nber.org/chapters/c4386
Chapter pages in book: (p. 1 - 2)INTRODUCTION
THE NATIONAL BUREAU'S FORTY-SECOND YEAR
At this time,itis the responsibility of the
Directors of Research to report to the National
Bureau's Board of Directors on studies com-
pleted, note the work done in studies under
way, and set forth the objectives of studies
begun; and to give similar information on the
conferences on research in which the Bureau
is involved. The responsibility is not only to
give full information on the Bureau's work but
also—as important—to assure the Board, and
the public we serve, that the Bureau's work is
proceeding inaccordance withitsguiding
principles.
It is well to recall these principles, as we
begin our review.
The National Bureau was organized, forty-
two years ago, to determine the facts bearing
upon major economic. problems. The Bureau
makes every effort to determine these facts ob-
jectively, and to interpret them impartially.
The Bureau cannot deal with all significant
economic problems; it therefore concentrates
on topics of national importance, and, among
topics of national importance, selects for study
those that appear susceptibleofscientific
treatment. Further, the Bureau avoids recom-
mendations on public policy, but it does not
avoid objective analysis of policy. Finally,
the Bureau does its work under such auspices
and with such safeguards as shall make its
findings carry conviction to thoughtful men,
however divergent their views on public policy.
Thus we aim to contribute objective knowl-
edge, as distinguished from subjective opinion,
to discussions of public issues of national
importance.
These are the principles on which we stand.
NOTE: This report was presented at the annual
meeting of the Board of Directors of the National
Bureau held in New York City, February 26, 1962.
The Board will want to keep these principles
in mind as it follows the review of the year's
work. For the Board must ask itself whether,
in fact, the staff of the National Bureau is
devoting its attention to topics of national im-
portance that are susceptible to scientific treat-
ment, and whether the work is being done
objectively and the results interpreted and
presented impartially.
Since the beginning of 1961, the National
Bureau has published twenty-one studies; five
are in press or on the way to press; and nine
are soon to be submitted to the Board for
approval. These are listed on pages 29 through
32 of Part II. Noted in Part III are the
various studies on which work is proceeding.
The new studies begun are listed on pages 27
through 28 of Part II.
Do these studies deal with topics of national
importance? In considering this question, the
Board will want to examine the subjects of
the studies. These are classified, under the
headings used in Part III, as studies of Eco-
nomic Growth; of National Income, Consump-
tion,and Capital Formation; of Business
Cycles; of Financial Institutions and Processes;
and of International Economic Relations. Are
the studies devoted directly to the of
important economic policies, existing or pro-
posed? Or,ifnot immediately focused on
policy, are they studies of economic behavior,
knowledge of which is vital in .assessingthe
trend of events or the consequences of change
in economic conditions or institutions? Or are
these studies aimed at developing or signifi-
cantly improving the basic economic data that
are needed for dealing with the country's major
economic problems? In other words, do the
studies bear, directly or indirectly, and in any
case significantly, on the major public issues
1of economic growth, stability of employment
and price levels, distribution of income and
wealth, and the balance of payments? The
Board may wish to consider, in this connection,
the uses made of the Bureau's results—as indi-
cated, for example, by recent requests from
congressional committees and federal execu-
tive departments for the results, before and
after publication, of our studies of produc-
tivity, prices, inventories, money supply, fi-
nance, and the balance of payments.
Another question: Are the topics with which
we are dealing and propose to deal susceptible
of scientific treatment? Consider, for example,
the new major study of taxation and economic
growth. Here we enter a field that is surely of
national importance, and as surely swept by a
multitude of diverse and strong opinions. Of
the many questions that can be examined here,
is the staff selecting for study those that are
important, and also those on which it is reason-
able to expect that objective knowledge, as
distinguished from subjective opinion, can be
attained?
Still another question: Is the staff proceed-
ing scientifically and with due safeguards to
insure objectivity •and impartiality? Let me
mention, as an illustration, how we did proceed
in the study of price changes and net worth,
part of the manuscript, "Studies in the Na-
tional Balance Sheet of the United States,"
which is now in the hands of the Board
for approval. Knowing of the extensive work
on the national balance sheet that the Na-
tional Bureau has been engaged in for some
time,theJoint Economic Committee re-
quested two years ago that we use our data
to show the varying effects of price chatiges on
the net worth of different groups in the econ-
omy. With much of the required data already
assembled, the staff was able to put together
2
very quickly an interesting and substantial
report on the question posed. It is very likely
that the draft report could have been pub-
lished, as it stood at the time,in. the Joint
Economic Committee's series of study papers
on "Employment, Growth, and Price Levels."
But, asis our custom, the manuscript was
read by various members of the Bureau's staff.
During our discussions it became clear that a
number of important analytical questions still
needed to be dealt with, and that certain inter-
esting results could be checked—and accepted
or rejected—by study of information not avail-
able when the original draft had been prepared.
The staff agreed that the time required for
these tasks would be worthwhile, even if the
report could not meet the deadline for inclu-
sion in the Joint Economic Committee series.
As I have stated, the report is now awaiting
approval by the Board—the final "safeguard."
The staff believes the study meets scientific
.stañdards. It will know that the Board agrees
when publication is approved.
Since my remarks are intended simply to
introduce the reports that follow, I will stop
here. The Board was kind enough to offer me
sabbatical relief from some of my administra-
five duties this year, and Geoffrey Moore has
been willing and able to make it possible for
me to take advantage of the opportunity. It is
Mr. Moore, therefore, who has been in charge
of this year's report on the National Bureau's
activities. In his essay on "Tested Knowledge
of Business Cycles," which follows, he takes
the time to describe in some detail an impor-
tant segment of our research. I believe the
Board and the public will find in his story what
it means to do scientific research in economics.
SOLOMON FABRICANT
Director of Research

Tested Knowledge Of Business Cycles

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