The Melbourne Institute was formed in 1962 as the Institute of Applied Economic Research under the leadership of Professor Ronald Henderson. It was the first economic research institute in an Australian university. Henderson built up an organisation with about 40 staff by the early 1970s. It engaged in a wide range of research areas including macroeconomic forecasting, financial economics and social economics, and is best remembered for its work on poverty and the development of the Henderson Poverty Line. The name of the institute was later changed to Institute of Applied Economic and Social Research (IAESR).