The Melbourne Institute "was formed in 1962 under the leadership of Professor Ronald Henderson. It was the first Economics 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.
"After the Henderson era, Peter Dixon was appointed Director and after some restructuring, the new Melbourne Institute based its operation around Dixon's ORANI model of the Australian economy. In the early 1990s Peter Dixon and a number of his senior colleagues left the institute to join Monash University. This necessitated a second period of adjustment and restructuring initiated by Professor Richard Blandy who was Director from 1992 to 1994.
"Professor Peter Dawkins, took up his position of Director in January 1996 until April 2005. In 1996, the Director and his senior management team, in association with the staff and the advisory board, developed a strategic plan with the unifying theme being the link between economic performance and social outcomes. The first version of this plan was for the period 1996-2000 and it is updated annually.
"From April 2005 until April 2007 the Director was Professor John Freebairn.
The Melbourne Institute Advisory Board for 2007 includes the following members: 
- Chairperson - Mr Tony Cole, Principal National Practice Leader, Investment Consulting, Mercer Investment Consulting
- Emeritus Chairman - Dr Peter Jonson, Professional Director and Economist
- Professor Margaret Abernethy, Dean, Faculty of Economics and Commerce, The University of Melbourne
- Ms Carol Austin, Investment Services Director, Contango Asset Management
- Mr Gary Banks, Chairman, Productivity Commission
- Dr Peter Boxall, Secretary, Department of Employment and Workplace Relations
- Professor Max Corden, Professorial Fellow, Department of Economics, The University of Melbourne
- Ms Rachel Derham, Business Manager, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne
- Mr Bill Evans, General Manager, Economics, Westpac Banking Corporation
- Dr Jeff Harmer, Secretary, Department of Families, Community Services and Indigenous Affairs
- Mr Grant Hehir, Secretary, Victorian Department of Treasury and Finance
- Dr Christopher Kent, Head, Economic Research Department, Reserve Bank of Australia
- Professor Guay Lim, Professorial Research Fellow, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne
- Professor Kostas Mavromaras, Professorial Research Fellow, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne
- Adjunct Professor Alison McClelland, Executive Director, Strategic Policy, Research and Communications Division, Department for Victorian Communities
- Professor John McKenzie, Deputy Vice-Chancellor (Research), The University of Melbourne
- Mr Tony Nicholson, Executive Director, Brotherhood of St Laurence
- Mr Phil Ruthven, Executive Chairman, IBISWorld
- Dr Elizabeth Webster, Principal Research Fellow, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne
- Professor Mark Wooden, Acting Director/Deputy Director and Professorial Research Fellow, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne