Council of Economic Advisers
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Council of Economic Advisers
Council of Economic Advisers
Council of Economic Advisers.png
Agency overview
Formed 1946; 71 years ago (1946)
Preceding agencies
Headquarters Eisenhower Executive Office Building
Employees About 35
Agency executive
Parent agency Executive Office of the President of the United States
Website Council of Economic Advisers

The Council of Economic Advisers (CEA) is a United States agency within the Executive Office of the President established in 1946, which advises the President of the United States on economic policy.[2] The CEA provides much of the objective empirical research for the White House and prepares the annual Economic Report of the President.

History, 1946-1978

The Truman administration established the Council of Economic Advisers via the Employment Act of 1946, to provide presidents with objective economic analysis and advice on the development and implementation of a wide range of domestic and international economic policy issues. It was a step from an "ad hoc style of economic policy making to a more institutionalized and focused process". In 1949 Chairman Edwin Nourse and member Leon Keyserling argued about whether the advice should be private or public and about the role of government in economic stabilization.[3]

Nourse believed a choice had to be made between "guns or butter" but Keyserling argued for deficit spending, an expanding economy could afford large defense expenditures without sacrificing an increased standard of living. In 1949, Keyserling gained support from Truman advisors Dean Acheson and Clark Clifford. Nourse resigned as chairman, warning about the dangers of budget deficits and increased funding of "wasteful" defense costs. Keyserling succeeded to the chairmanship and influenced Truman's Fair Deal proposals and the economic sections of National Security Council Resolution 68 that, in April 1950, asserted that the larger armed forces America needed would not affect living standards or risk the "transformation of the free character of our economy."[4]

During the 1953-54 recession, the CEA, headed by Arthur Burns deployed non-traditional neo-keynesian interventions, which provided results later called the "steady fifties" wherein many families stayed in the economic "middleclass" with just one family wage-earner. The Eisenhower Administration supported an activist contracyclical approach that helped to establish Keynesianism as a possible bipartisan economic policy for the nation. Especially important in formulating the CEA response to the recession--accelerating public works programs, easing credit, and reducing taxes--were Arthur F. Burns and Neil H. Jacoby.[5]

Until 1963 -during its first seven years- the CEA made five technical advances in policy making, including the replacement of a "cyclical model" of the economy by a "growth model," the setting of quantitative targets for the economy, use of the theories of fiscal drag and full-employment budget, recognition of the need for greater flexibility in taxation, and replacement of the notion of unemployment as a structural problem by a realization of a low aggregate demand.[6]

The 1978 Humphrey-Hawkins Full Employment Act required each administration to move toward full employment and reasonable price stability within a specific time period. It has made CEA's annual economic report highly political in nature, as well as highly unreliable and inaccurate over the standard two or five year projection periods.[7]

History 1978-present

Since 1980, the CEA focused on sources of economic growth, the supply side of the economy and on international issues.[3]

Organization

The council's chairman is nominated by the president and approved by the United States Senate. The members are appointed by the president. As of July 2017, the council´s 18 person staff consisted of a chief of staff (Director of Macroeconomic Forecasting), 15 economists (5 senior, 4 research, 4 staff economists, 2 economic statisticians) and 2 operations staff.[8]Many of the staff economists are academics on leave or government economists on temporary assignment from other agencies.[]

Chairmen and members

List of chairmen

Officeholder Term start Term end President
Edwin G. Nourse August 9, 1946 November 1, 1949 Harry Truman
Leon Keyserling
Acting: 1949-1950
November 2, 1949 January 20, 1953
Arthur F. Burns March 19, 1953 December 1, 1956 Dwight Eisenhower
Raymond J. Saulnier December 3, 1956 January 20, 1961
Walter Heller January 29, 1961 November 15, 1964 John F. Kennedy
Lyndon Johnson
Gardner Ackley November 16, 1964 February 15, 1968
Arthur M. Okun February 15, 1968 January 20, 1969
Paul W. McCracken February 4, 1969 December 31, 1971 Richard Nixon
Herbert Stein January 1, 1972 August 31, 1974
Gerald Ford
Alan Greenspan September 4, 1974 January 20, 1977
Charles Schultze January 22, 1977 January 20, 1981 Jimmy Carter
Murray Weidenbaum February 27, 1981 August 25, 1982 Ronald Reagan
Martin Feldstein October 14, 1982 July 10, 1984
Beryl W. Sprinkel April 18, 1985 January 20, 1989
Michael J. Boskin February 2, 1989 January 20, 1993 George H. W. Bush
Laura Tyson February 5, 1993 February 21, 1995 Bill Clinton
Joseph Stiglitz June 28, 1995 February 13, 1997
Janet Yellen February 18, 1997 August 3, 1999
Martin N. Baily August 12, 1999 January 20, 2001
Glenn Hubbard May 11, 2001 February 28, 2003 George W. Bush
Greg Mankiw May 29, 2003 February 18, 2005
Harvey S. Rosen February 23, 2005 June 10, 2005
Ben Bernanke June 21, 2005 January 31, 2006
Edward Lazear February 27, 2006 January 20, 2009
Christina Romer January 28, 2009 September 3, 2010 Barack Obama
Austan Goolsbee September 10, 2010 August 5, 2011
Alan Krueger November 7, 2011 August 2, 2013
Jason Furman[9] August 2, 2013 January 20, 2017
Kevin Hassett[10] September 13, 2017 Incumbent Donald Trump

List of members

References

  1. ^ a b Wage and Price Controls Encyclopedia.com n.d.
  2. ^ Council of Economic Advisers 
  3. ^ a b Remarks by Chairman Alan Greenspan. Receipt of the Truman Medal for Economic Policy. Before the Truman Medal Award and Economics Conference, Kansas City, Missouri October 26, 2005, Council of Economic Advisers website under President Bush
  4. ^ Brune 1989
  5. ^ Engelbourg 1980
  6. ^ Salant 1973
  7. ^ Cimbala and Stout 1983
  8. ^ Council of Economic Advisers. Staff Whitehouse.gov, n.d. accessed 29 July 2017
  9. ^ "Obama names Furman as new White House chief economist", Reuters, 2013-06-10 
  10. ^ "Senate Confirms Kevin Hassett as Chairman of the President's Council of Economic Advisers", The Wall Street Journal, 2017-09-12 

Sources

  • Brazelton, W. Robert (2001), Designing U.S. Economic Policy: An Analytical Biography of Leon H. Keyserling, New York: Palgrave, ISBN 0-333-77575-9 
  • Brazelton, W. Robert (1997), "The Economics of Leon Hirsch Keyserling", Journal of Economic Perspectives, 11 (4): 189-197, doi:10.1257/jep.11.4.189, ISSN 0895-3309 
  • Brune, Lester H. (1989), "Guns and Butter: the Pre-Korean War Dispute over Budget Allocations: Nourse's Conservative Keynesianism Loses Favor Against Keyserling's Economic Expansion Plan", The American Journal of Economics and Sociology, 48 (3): 357-371, doi:10.1111/j.1536-7150.1989.tb03189.x, ISSN 0002-9246 
  • Cimbala, Stephen J.; Stout, Robert L. (1983), "The Economic Report of the President: Before and after the Full Employment and Balanced Growth Act of 1978", Presidential Studies Quarterly, 13 (1): 50-61, ISSN 0360-4918 
  • Eizenstat, Stuart E. (1992), "Economists and White House Decisions", Journal of Economic Perspectives, 6 (3): 65-71, doi:10.1257/jep.6.3.65, ISSN 0895-3309 
  • Engelbourg, Saul (1980), "The Council of Economic Advisers and the Recession of 1953-1954", Business History Review, 54 (2): 192-214, doi:10.2307/3114480, ISSN 0007-6805, JSTOR 3114480 
  • Leeson, Robert (1997), "The Political Economy of the Inflation-unemployment Trade-off", History of Political Economy, 29 (1): 117-156, doi:10.1215/00182702-29-1-117, ISSN 0018-2702 
  • McCaleb, Thomas S. (1986), "The Council of Economic Advisers after Forty Years", Cato Journal, 6 (2): 685-693, ISSN 0273-3072 
  • Norton, Hugh S. (1977), The Employment Act and the Council of Economic Advisers, 1946-1976, Columbia: University of South Carolina Press, ISBN 0-87249-296-6 
  • Salant, Walter S. (1973), "Some Intellectual Contributions of the Truman Council of Economic Advisers to Policy-making", History of Political Economy, 5 (1): 36-49, doi:10.1215/00182702-5-1-36, ISSN 0018-2702 
  • Sobel, Robert (1988), Biographical Directory of the Council of Economic A dvisers, New York: Greenwood Press, ISBN 0-313-22554-0 
  • Tobin, James; Weidenbaum, Murray, eds. (1988), Two Revolutions in Economic Policy: The First Economic Reports of Presidents Kennedy and Reagan, Cambridge: MIT Press, ISBN 0-262-70034-4 
  • Wehrle, Edmund F. (2004), "Guns, Butter, Leon Keyserling, the AFL-CIO, and the Fate of Full-employment Economics", Historian, 66 (4): 730-748, doi:10.1111/j.1540-6563.2004.00094.x, ISSN 0018-2370 

External links


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