This organization, originally under the guidance of Wesley Claire Mitchell (1874–1948), pioneered business cycle research in the late 1920s. Today the NBER's decisions regarding the reference cycle are taken as gospel, although they are, in fact, quite subjective. No single time series or group of time series is decreed to be
the reference cycle. A committee of professional business cycle analysts convened by the NBER establishes the official peaks and troughs in accordance with the following definition:
Business cycles are a type of fluctuation found in the aggregate economic activity of nations that organize their work mainly in business enterprises: a cycle consists of expansions occurring at about the same time in many economic activities, followed by similarly general recessions, contractions and revivals which merge in the expansion phase of the next cycle; this sequence of changes is recurrent but not periodic; in duration business cycles vary from more than one year to ten or twelve years; they are not divisible into shorter cycles of similar character with amplitudes approximately their own. (Burns and Mitchell, 1946, p. 3)
With slight modification, this definition has been used since 1927. Although most of the definition is self-explanatory, it is not all that rigorous.
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