AIER Stone House at Sunset

Integrity, Research, and Principle in the Study of Markets Since 1933

The American Institute for Economic Research was the first independent voice for economic research in the United States. Today it publishes ongoing editorials and research, hosts educational programs, sponsors interns and scholars, and is home to the world-renowned Bastiat Society and the Sound Money Project. The American Institute for Economic Research is a 501c3 public charity.

View AIER’s 2018 Annual Report


AIER is the publisher of many books and the acclaimed Business Conditions Monthly among many regular research reports, daily articles, summer seminar, year-round internships, and scholarly colloquia at our beautiful Cotswold Cottage and office in Great Barrington, Massachusetts. Staff and scholars appear regularly in major media venues in the US and around the world to speak on behalf of sound economics and policy. AIER also publishes the Harwood Economic Review.

Through the Bastiat Society program, AIER is expanding its reach into communities around the world. The program’s network has grown to host more than 140 events each year where thousands of regular people meet to discuss issues which are central to AIER’s mission and philosophy.

Focusing on economic freedom, sound money, individual liberty, and responsible governance, attendees learn what it means to be a principled business person. Furthermore, our attendees and members connect with each other, become mentors, build meaningful relationships and bring our ideas to their friends and colleagues.

The Sound Money Project of AIER was founded in January 2009 to conduct research and promote awareness about monetary stability and financial privacy. The project is comprised of leading academics and practitioners in money, banking, and macroeconomics. It offers regular commentary and in-depth analysis on monetary policy, alternative monetary systems, financial markets regulation, cryptocurrencies, and the history of monetary and macroeconomic thought.

AIER’s Teach the Teachers Program targets an audience of high school teachers with in-person seminars coupled with online lesson plans and follow-ups. Students are exposed to alternative views such as the possibility that the Federal Reserve causes the business cycle.


By 1933, the magnitude of the Great Depression suggested the need for a research organization to inquire into the wide range of economic, social, and monetary developments that had contributed to the catastrophic economic contraction. The hope was that by further developing and applying modern scientific procedures of inquiry, results could be obtained that would be useful to the Nation in avoiding a repetition of the disaster. On the advice of Dr. Vannevar Bush, then vice-president of the Massachusetts Institute of Technology, Col. E. C. Harwood founded American Institute for Economic Research (AIER) to conduct the necessary research.

Initially AIER was housed in the office of a staff member at the Massachusetts Institute of Technology, but soon expansion required more space. For several years the Institute occupied buildings in Cambridge, Massachusetts that it also soon outgrew.

At the end of the Second World War, Col. E. C. Harwood and Helen Harwood investigated the potential of several “white elephants” in Berkshire County, Massachusetts as a new home for AIER. After successful negotiations, they moved operations to Great Barrington. After several months of preparing the new location, AIER resumed full operation at its new location with plenty of room for future expansion.

By 1956 subscription and book sales had outgrown its allotted space. In 1957, the mailing and printing were transferred to an annex. In 1958, a warehouse was added to the annex to accommodate increasing volumes of paper, envelopes, and mail.

To accommodate the expansion of research staff, students, and books, in 1962 a research library was added to the hillside below the annex. Now known as the E. C. Harwood Library, the 20,000 square-foot building contains AIER’s principal offices.

AIER’s independence from special-interest groups – and its close attention not only to proposed solutions of fundamental economic problems but also to useful procedures of inquiry into those problems – makes AIER unique among economic research organizations. AIER’s long-run success attests the need for economic research carried out in such a manner.

For more history of AIER, read The Golden Constant: 75 years of Free Thinking on the Free Market.

Our Founder – E.C. Harwood (1900-1980)

Col. Harwood, a graduate of the United States Military Academy, was serving in the Army Corps of Engineers in the 1920s when he undertook as an avocation the intensive study of economics, with particular emphasis on money-credit problems. He began with economic texts by authors whose names began with “A” and exhausted a library in less than three years. He found chaos among economists’ views arising from semantic mires and pre-scientific notions about human “knowledge.”

He next began intensive study of what philosophers and logicians had said about knowing, finding there, too, muddled inquiries. Some American philosophers, Charles S. Peirce and William James, were different and had broken with ancient traditions by incorporating scientific procedures. Later, John Dewey and Arthur F. Bentley furthered scientific analysis with their development of a “transactional” approach to “problem solving.” Since its beginning, AIER has recognized the importance of developing and adhering to such useful procedures of inquiry as antecedent and inseparably linked to inquiry in all fields, including economics.

In 1928 and 1929 Col. Harwood warned in several articles published in the financial journals that the speculative “boom” then underway was attributable primarily to the excessive creation of purchasing media and that the failure to stop the inflating process would lead to a major “bust.”

By 1933 the magnitude of the Great Depression suggested the need for an independent research organization to inquire into the wide range of economic, social, and monetary developments that had contributed to the catastrophic economic contraction. Col. Harwood deemed necessary that such an organization avoid financial dependence on a few individuals or groups with pet panaceas or special interests. Vice President Vannevar Bush of MIT suggested that an independent research organization offering its results directly to the public might be possible.

With $200 Col. Harwood began operations in 1933. Since its inception, the Institute’s publications have enjoyed a wide sale, and thousands of Sustaining Members provide a financial base for its work.

A Published Author at 32

When Edward C. Harwood published Cause and Control of the Business Cycle, in 1932, it earned favorable mention by the Book-of-the-Month Club. Some readers may have regarded his background as odd for that of an economist — he was then a first lieutenant in the U.S. Army and an associate professor in military science at the Massachusetts Institute of Technology. But his book was based upon his analytical works that had led him to pen more than 100 published magazine, journal and newspaper articles to date.

Originally a self-taught economist who later added a master’s of business administration degree, Harwood had studied government and banking excess for years, and had built himself a reputation for prediction — including that of the massive U.S. economic contraction that became known as the Great Depression. A series of his articles in The Annalist in 1928 and 1929 issued dire warnings.

Harwood’s article, “The Probable Consequences to Our Credit Structure of Continued Gold Export,” ran in March 1928, and noted that gold export would necessitate either a large reduction in bank reserves or — if the accepted 75 percent reserve requirement were maintained — a giant reduction in bank loans, because $1 billion of reserves supported “some $15.2 billion of deposits in member banks.” He continued that because member and non- member Federal Reserve banks were fully extended, and Reserve banks themselves could not export gold without a drastic drop in deposits, the nation’s credit “shoe” was likely to pinch.

The next month, The Annalist ran another Harwood article, “The Underlying Causes of Our Recent Prosperity: Why the End Is Near.” Harwood opined that, “Business has already started on the downward part of the [business] cycle.” In February 1929, his article, “Speculation in Securities vs. Commodity Speculation,” asserted, “It is plain, therefore, that the future holds undesirable possibilities. There is every indication that the lesson as to liquidity of loans on securities will be forcibly impressed on bankers and business men in the not far distant future.”

Harwood’s sounding of an alarm was repeated in his article in August 1929, titled, “Deterioration of the American Bank Portfolio — a Ratio Analysis, 1920-28.” He concluded: “It seems to this writer that the concrete evidence herein presented offers a far more satisfying explanation of the prosperity of the past few years than the ‘new-era’ brand of reasoning; and further, that the time may not be far distant when the country will realize, in the light of a cold gray ‘morning after,’ that it has just been on another credit-splurging spree.”

Two months later, the reality of that “credit-splurging spree” hit home on Oct. 28 — “Black Monday” — when the Dow Jones Industrial Average plummeted 13 percent, to be followed by another 12 percent drop the following day, with no ensuing rally. By 1931, about $50 billion (or approximately $811 billion in 2017 dollars) had been lost to investors in the stock market alone.

Cause and Control of the Business Cycle would end up being the first of nine books Harwood would publish in his lifetime. The others: What Will Devaluation Mean To You?, 1934; Life Insurance from the Buyer’s Point of View, 1935; Current Economic Delusions, 1938; Reconstruction of Economics, 1955; Useful Economics, 1956; Twentieth-Century Common Sense, 1958; Useful Procedures of Inquiry, 1973; A Current Appraisal of the Behavioral Sciences, 1973.

For more information on E.C. Harwood, please read E.C. Harwood’s Vision and Its Realization.”

Our Campus

AIER - Americab Institute for Economic Research

The Main House

The Institute was originally located in Cambridge, Massachusetts. At the end of World War II, founder Edward C. Harwood relocated to a Cotswold cottage-style manor in Great Barrington, Massachusetts. The Main House at AIER was built in the late 1920’s.


American Institute for Economic Research educates Americans on the value of personal freedom, free enterprise, property rights, limited government and sound money. AIER’s ongoing scientific research demonstrates the importance of these principles in advancing peace, prosperity and human progress.

E.C. Harwood Library

The E.C. Harwood Library was built in 1962 on the hillside below the Main House to accommodate research staff and its extensive library collection. This 10,000 square-foot building was renovated in 2002 and contains the principal offices for the AIER research and support staff.

The AIER staff, 1962. E.C. and Helen Harwood are in the second row, center.
AIER staff and fellows December 2019