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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

ECRI History

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  • ECRI Event

    1920

    Wesley C. Mitchell helps start the NBER

    Mitchell and his colleagues establish the National Bureau of Economic Research with a primary objective of investigating business cycles.

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  • ECRI Event

    1927

    Mitchell establishes classical definition of business cycle

    Mitchell's 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 into 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 approximating their own.”

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  • Global Event

    1929

    Stock market crash; Great Depression begins

    Business cycle research has a practical emergency on its hands. Between 1929 and 1933, U.S. GDP falls 35% and unemployment rises above 25%. With the depression lingering for years, U.S. Treasury Secretary Henry Morgenthau Jr. asks Mitchell about developing economic indicators that might foresee an economic revival.

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  • ECRI Event

    1938

    Mitchell & Arthur F. Burns identify leading indicators of revival

    In response to Morgenthau's request, Mitchell and Burns identify the first ever set of “leading indicators of cyclical revival”.

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  • ECRI Event

    1938

    Geoffrey H. Moore joins NBER

    Moore joins Mitchell and Burns at the NBER.

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  • ECRI Event

    1946

    Burns & Mitchell publish Measuring Business Cycles

    Their magnum opus sets the stage for the next generation of business cycle research.

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  • ECRI Event

    1946

    Moore teaches Alan Greenspan at NYU

    In Moore's Statistics 1 course, Greenspan and other students are exposed to a rigorous approach to business cycle research.

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  • ECRI Event

    1950

    Moore develops first-ever “leading indicators of cyclical revival and recession”

    Moore uses post-Civil War data to build on the work of his mentors, Mitchell and Burns, to develop the first-ever predictors of both revival and recession — leading indicators as we know them today.

    About leading indicators

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  • ECRI Event

    1958 to 1967

    Moore creates the original composite index of leading indicators

    Moore, with the help of Julius Shiskin, develops the composite index method, and the original composite indexes of leading, coincident, and lagging indicators of the U.S. economy.

    About composite indexes

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  • ECRI Event

    1968

    U.S. government adopts Moore's composite indexes

    Moore gives his original composite leading, coincident and lagging indexes to the U.S. government. The government adopts and publishes these, with the LEI (Index of Leading Economic Indicators) as its main forecasting gauge in Business Cycle Developments (BCD). Today ECRI continues this tradition of public service.

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  • Global Event

    Late 1960s

    U.S. expansion becomes longest on record

    During the longest expansion on record at the time (surpassed in the 1990s), many believe that the business cycle had become obsolete: that the country was in a new era of endless prosperity. Concerned that business cycles were passé, the government renames its publication, Business Cycle Developments, to Business Conditions Digest, thus dropping the phrase ‘Business Cycle,’ while retaining the acronym (BCD).

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  • ECRI Event

    1969

    Moore appointed U.S. Commissioner of Labor Statistics

    Moore takes a four-year leave from NBER but continues studying business cycles. He persuades the government to start collecting additional statistics (such as the Employment Cost Index).

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  • ECRI Event

    1973

    Moore and Philip A. Klein begin developing international leading index

    Using the U.S. leading and coincident indicators as templates, Moore and Klein identify analogous cyclical patterns in multiple countries, an endeavor that continues at ECRI. This has been called “the longest running experiment in economics.” Today ECRI maintains business cycle chronologies and leading indicator systems for more than 21 countries.

    About International Growth and Cycle Dates

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  • Global Event

    1970s

    Computerization enables advancements in business cycle research

    Moore and others harness technology. Charting, a key aspect of business cycle research, becomes easier with computers, eliminating the need for draftsmen. Moore's colleagues develop computer algorithms for cycle research. Charlotte Boschan, who worked with Moore, develops the first electronic macroeconomic database.

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  • ECRI Event

    1979

    Moore establishes Center for International Business Cycle Research (CIBCR)

    To continue Mitchell's long-term vision, Moore founds CIBCR at Rutgers University with the help of many NBER colleagues; four years later CIBCR moves to Columbia University.

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  • ECRI Event

    Early 1980s

    Moore develops separate leading indexes for inflation and employment

    Looking at cycles in employment, inflation, and economic growth individually reveals a more sophisticated view of the economy. Moore's work in studying these cycles separately leads to today's Future Inflation Gauge (FIG), laying the foundation for today's multi-cycle approach.

    Monitoring Business Cycles Today

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  • Global Event

    1994-95

    Soft landing

    The U.S. economy's longest expansion in history is aided by a rare soft landing engineered by the Fed, which preemptively hikes and then cuts rates. In February 1994, following a surprise rate hike, Chairman Greenspan testifies in Congress that: “anything that Geoffrey Moore does I follow closely,” to which a Congressman replies: “No kidding.” Our research group's work gains a wider following in the financial markets.

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  • ECRI Event

    1996

    ECRI is founded

    Geoffrey H. Moore receives the American Economic Association's Distinguished Fellow Award. Moore, along with his protégés, Lakshman Achuthan and Anirvan Banerji, creates a completely independent research group, ECRI. The new organization is joined by virtually all of the founder's CIBCR colleagues

    About ECRI's services

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  • ECRI Event

    Mid - to Late 1990s

    The “many-cycles” approach: ECRI takes cycle forecasting to the next level

    To capture the complex dynamics of the global economy, ECRI builds on Moore's work and focuses on the interrelationships among cycles in inflation, employment, and economic growth. The research team develops long leading, short leading, and coincident indicators. ECRI is also able to monitor the transmission of cycles within and among geographical regions, major sectors of each economy, and specific industries.

    About the ECRI approach

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  • ECRI Event

    2000

    Geoffrey H. Moore passes away

    In March 2000, Moore dies at the age of 86, after a 62-year career in business cycle research.

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  • ECRI Event

    2000

    New approach for a globalized economy

    ECRI develops a long leading index for global industrial growth based on a conceptual breakthrough. With a one-year lead time, this index quickly becomes a client favorite.

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  • ECRI Event

    2004

    Beating the Business Cycle published

    With ECRI having predicted the 2001 recession, there is popular demand for a better understanding of ECRI's approach, leading to the publication of Beating the Business Cycle, written by Achuthan and Banerji.

    Learn more

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  • ECRI Event

    2005

    ECRI develops first-ever leading index for China

    After years of research, ECRI introduces the first-ever leading index for China, having already (1999) introduced the first-ever leading index for India.

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  • ECRI Event

    July 2012

    ECRI introduces leading indexes for Russia

    In 2012 ECRI introduced leading indexes for Russia, having earlier completed the development of leading indexes for Brazil in 2011. As a result, ECRI's array of global leading indexes includes all the BRICS (Brazil, Russia, India, China and South Africa).

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  • ECRI Event

    Present day

    Present day

    Having successfully navigated the Great Recession, ECRI continues to grow at its midtown Manhattan offices, with regular coverage of 21 countries on six continents, representing 80% of world GDP.

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