"Academic economists are moving closer to adopting a code of ethics in response to criticism that ethical lapses in the profession helped precipitate the 2008 financial crisis.
Many economists work with companies, financial firms, governments and other organizations that are eager to tap their expertise. That has opened them up to charges that the often lucrative consulting fees they were receiving first blinded them to the risks to the economy heading into the financial crisis and then steered them toward offering policy responses that benefited their clients. But because the potential conflicts of interest weren't generally known, government officials, the news media and the public took their assessments at face value.
The American Economic Association, the largest professional society for economists, decided last January to consider creating ethical guidelines for its membership. That is something that other academic associations, such as the American Sociological Association, have already done, but that the AEA for years resisted.
The group's change of heart was partly motivated by the public attention the documentary "Inside Job"-winner last February of an Academy Award-drew to the consulting relationships of several influential economists. Among them: Harvard University's Martin Feldstein, who served on the board of American International Group Inc. in 2008, when the government saved it from the brink of collapse, and Columbia Business School's Frederic Mishkin, a former Federal Reserve governor, who in a 2006 report sponsored by the Iceland Chamber of Commerce painted a bright picture of that remote country's economy, two years before it collapsed."
"The group is focusing on providing disclosure guidelines to economists when they face conflicts of interest, Mr. Solow said."
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