WASHINGTON -- In the fall of 1981, 20 top corporate economists issued an economic forecast to the Business Council, composed of top corporate executives, predicting that there would be no recession.
In fact, a recession had begun the previous July that was to last until November 1982 and cause the unemployment rate to reach 10.8 percent, the highest since the Great Depression.
The council's mistaken forecast underlies the difficulties of pinpointing in what month a recession begins and ends.
That arduous task has been left to a seven-member business-cycle committee at the National Bureau ofEconomic Research in Cambridge, Mass., the recognized official arbiter of recessions.
The panel reviews piles of economic statistics and determines whether the economy has changed direction by contracting, in which case a recession has occurred, or by expanding, the signal that a recovery has started.
So much information on the economy is accumulated, and revisions are so frequent, that the panel takes its time in issuing its proclamations.
The committee decided in January 1982 that a recession had begun the previous July. In July 1983, it announced that the recession had ended the previous November.
A recession is commonly defined as two consecutive quarters in which the gross national product declines.
But the bureau, a non-profit research group financed by government and private grants, has its own definition.
It says a recession is "a recurring period of decline in total output, income, employment and trade, usually lasting from six months to a year and marked by widespread contractions in many sectors of the economy."
Robert Hall of Stanford University is chairman of the committee. The other members are Geoffrey Moore, director of international business-cycle research at Columbia University; William Branson of Princeton University; Martin Feldstein and Benjamin Friedman of Harvard University; Robert Gordon of Northwestern University; and Victor Zarnowitz of the University of Chicago.