The Formation of Research Institutes on Business Cycles in Europe in the Interwar Period: The “Kiel School” and (In)Voluntary Internationalization

Abstract

Theoretical and empirical research on business cycles became the dominant theme in economics in the interwar period. The foundation of the Harvard Committee in 1917 and the NBER in 1920 in the USA stimulated the foundation of similar research institutions in many European countries from the mid-1920s onwards, often co-financed by the Rockefeller Foundation. A special focus is on the Kiel Institute of World Economics which in the years 1926–1933 attracted many scholars who soon gained international reputation, so that Schumpeter in a letter to Keynes from October 1932 classified it as “the finest economic institute in the world.” A few months later, almost all leading economists were forced to emigrate, from Nazi Germany, continuing their academic career mainly in the UK and the USA.