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Council of Economic Advisers

Agency overview
Formed	1946; 78 years ago (1946)
Preceding agencies	Office of Price Administration (World War II) Council on Wage and Price Stability (Carter era)
Headquarters	Eisenhower Executive Office Building
Employees	About 35
Agency executive	Jared Bernstein, Chair
Parent agency	Executive Office of the President of the United States
Website	wh.gov/cea

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. The CEA provides much of the empirical research for the White House and prepares the publicly-available annual Economic Report of the President. The council is made up of its chairperson and generally two to three additional member economists. Its chairperson requires appointment and Senate confirmation, and its other members are appointed by the President.

Activities

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Economic Report of the President

The report is published by the CEA annually in February, no later than 10 days after the Budget of the US Government is submitted. The president typically writes a letter introducing the report, serving as an executive summary. The report proceeds with several hundred pages of qualitative and quantitative research reviewing the impact of economic activity in the previous year, outlining economic goals for the coming year (based on the President's economic agenda), and making numerical projections of economic performance and outcomes. The data referenced or used in the report are from the Bureau of Economic Analysis and U.S. Bureau of Labor Statistics.

History

Establishment

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". The act gave the council the following goals:

1. to assist and advise the President in the preparation of the Economic Report;

2. to gather timely and authoritative information concerning economic developments and economic trends, both current and prospective, to analyze and interpret such information in the light of the policy declared in section 2 for the purpose of determining whether such developments and trends are interfering, or are likely to interfere, with the achievement of such policy, and to compile and submit to the President studies relating to such developments and trends;

3. to appraise the various programs and activities of the Federal Government in the light of the policy declared in section 2 for the purpose of determining the extent to which such programs and activities are contributing, and the extent to which they are not contributing, to the achievement of such policy, and to make recommendations to the President with respect thereto;

4. to develop and recommend to the President national economic policies to foster and promote free competitive enterprise, to avoid economic fluctuations or to diminish the effects thereof, and to maintain employment, production, and purchasing power;

5. to make and furnish such studies, reports thereon, and recommendations with respect to matters of Federal economic policy and legislation as the President may request.

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. Nourse believed a choice had to be made between "guns or butter" but Keyserling argued for deficit spending, asserting that 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 NSC 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".

1950s–80s

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 "middle class" 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.

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.

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 been criticized for making 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.

1980–present

This section needs expansion. You can help by adding to it. (July 2017)

Since 1980, the CEA has focused on sources of economic growth, the supply side of the economy, and on international issues. In the wake of the Great Recession of 2008–09, the Council of Economic Advisers played a significant role in supporting the American Recovery and Reinvestment Act.

Organization

The council's chairman is nominated by the president and confirmed by the United States Senate. The members are appointed by the president. As of July 2017, the council's eighteen person staff consisted of a chief of staff (Director of Macroeconomic Forecasting), fifteen economists (five senior, four research, four staff economists, two economic statisticians) and two operations staff. Many of the staff economists are academics on leave or government economists on temporary assignment from other agencies.

Composition

Chairs

Chief Advisers

• Joshua D. Rauh 2019–2020
• Kevin Corinth 2020–2021
• Ernie Tedeschi 2023–present (March 2024)

Members

• John D. Clark 1946–1953
• Roy Blough 1950–1952
• Leon Keyserling 1950–1953
• Robert C. Turner 1952–1953
• Karl A. Fox 1953–1955
• Neil H. Jacoby 1953–1955
• Asher Achinstein 1954–1956
• Walter W. Stewart 1953–1955
• Joseph S. Davis 1955–1958
• Paul W. McCracken 1956–1959
• Karl Brandt 1958–1961
• Henry C. Wallich 1959–1961
• James Tobin 1961–1962
• Kermit Gordon 1961–1962
• John P. Lewis 1963–1964
• Otto Eckstein 1964–1966
• James S. Duesenberry 1966–1968
• Merton J. Peck 1968–1969
• Warren L. Smith 1968–1969
• Paul Wonnacott 1968-1970, 1991-1993
• Hendrik S. Houthakker 1969–1971
• Herbert Stein 1969–1971
• Ezra Solomon 1971–1973
• Marina von Neumann Whitman 1972–1973
• Gary L. Seevers 1973–1975
• William J. Fellner 1973–1975
• Paul. W. MacAvoy 1975–1976
• Burton G. Malkiel 1975–1977
• William D. Nordhaus 1977–1979
• Lyle E. Gramley 1977–1980
• George C. Eads 1979–1981
• Stephen Goldfeld 1980–1981
• William A. Niskanen 1981–1985
• Jerry L. Jordan 1981–1982
• William Poole 1982–1985
• Thomas Gale Moore 1985–1989
• Michael L. Mussa 1986–1988
• John B. Taylor 1989–1991
• Richard L. Schmalensee 1989–1991
• David F. Bradford 1991–1993
• Paul Wonnacott 1991–1993
• Alan S. Blinder 1993–1994
• Carolyn Fischer 1994-1995
• Joseph Stiglitz 1993–1995
• Martin N. Baily 1995–1996
• Alicia H. Munnell 1996–1997
• Jeffrey A. Frankel 1997–1999
• Rebecca Blank 1998–1999
• Yu-Chin Chen 1999–2000
• Robert Z. Lawrence 1999–2001
• Kathryn L. Shaw 2000–2001
• Mark B. McClellan 2001–2002
• Randall S. Kroszner 2001–2003
• Kristin Forbes 2003–2005
• Harvey S. Rosen 2003–2005
• Katherine Baicker 2005–2007
• Matthew J. Slaughter 2005–2007
• Donald B. Marron Jr. 2008–2009
• Cecilia Rouse 2009–2011
• Carl Shapiro 2011–2012
• Katharine Abraham 2011–2013
• James H. Stock 2013–2014
• Betsey Stevenson 2013–2015
• Maurice Obstfeld 2014–2015
• Jay Shambaugh 2015–2017
• Sandra Black 2015–2017
• Richard Burkhauser 2017–2019
• Tomas J. Philipson 2017–2020
• Tyler Goodspeed 2019–2021
• Heather Boushey 2021–present
• Jared Bernstein 2021–2023
• Kirabo Jackson 2023–present

References

1. ^ Wage and Price Controls Encyclopedia.com n.d.
2. Council of Economic Advisers
3. "Economic Report of the President". govinfo.
4. "Economic Report of the President | CEA". The White House. Retrieved 2023-06-04.
5. "Economic Report of the President". The White House. Retrieved 2023-06-04.
6. "History of the CEA". The White House. Retrieved 4 May 2021.( Public domain)
7. ^ 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
8. Brune 1989
9. Engelbourg 1980
10. Salant 1973
11. Cimbala and Stout 1983
12. ^ Flickenschild; Michael, Afonso, Alexandre (2018). "Networks of economic policy expertise in Germany and the United States in the wake of the Great Recession". Journal of European Public Policy. 26 (9): 1292–1311. doi:10.1080/13501763.2018.1518992. hdl:1887/71157.{{cite journal}}: CS1 maint: multiple names: authors list (link)
13. Council of Economic Advisers. Staff Whitehouse.gov, n.d. accessed 29 July 2017
14. "Obama names Furman as new White House chief economist". Reuters. 2013-06-10.
15. "Senate Confirms Kevin Hassett as Chairman of the President's Council of Economic Advisers". The Wall Street Journal. 2017-09-12.
16. "Rauh named Principal Economic Adviser". 20 November 2019. Retrieved March 21, 2024.
17. "Kevin Corinth Bio". American Enterprise Institute - AEI. Retrieved March 21, 2024.
18. "Tedeschi tapped to be Chief Economist". Retrieved March 21, 2024.

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, S2CID 154554637
• Flickenschild, Michael, Afonso, Alexandre (2018), "Networks of economic policy expertise in Germany and the United States in the wake of the Great Recession", Journal of European Public Policy, 26 (9): 1292–1311, doi:10.1080/13501763.2018.1518992, hdl:1887/71157, ISSN 1466-4429{{citation}}: CS1 maint: multiple names: authors list (link)
• 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 Advisers, 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, S2CID 143607377

External links

• Official website
• List of reports by the Council of Economic Advisors, 2017-2021
• Records of the Office of the Council of Economic Advisors, Dwight D. Eisenhower Presidential Library, 1953–61
• Papers of Arthur F. Burns, Dwight D. Eisenhower Presidential Library
• Papers of Raymond J. Saulnier, Dwight D. Eisenhower Presidential Library
• Economic Report of the President:
  • Economic Report of the President, 2009–2017
  • Economic Reports 1947 to present on FRASER, St. Louis Federal Reserve
  • U.S. Bureau of Economic Analysis (BEA) '
  • U.S. Bureau of Labor Statistics
  • Economic Report of the President (1995–present) United States Government Publishing Office

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