Say a famous econ professor gets paid to do some consulting work for a bank. A few months later, the professor testifies before Congress about banking regulation. Does he have an ethical obligation to disclose the consulting work he did for the bank?
Yes, according to an open letter a group of economists sent this week to the head of the American Economic Association, calling for the organization to adopt a code of ethics.
The letter was organized by Gerald Epstein and Jessica Carrick-Hagenbarth of U. Mass Amherst. In a study last year, the pair found that high-profile economists often fail to disclose conflicts of interest.
George Akerlof, a Nobel laureate and former president of the AEA, co-signed this week's letter, along with hundreds of other economists.
The letter's key call to action comes in the first sentence:
We strongly urge the American Economic Association (AEA) to adopt a code of ethics that requires disclosure of potential conflicts of interest that can arise between economists' roles as economic experts and as paid consultants, principals or agents for private firms.
The AEA is holding its annual meeting this weekend; the New York Times recently reported that the group's executive committee will take up a proposal to "consider the association's role regarding ethical standards for economists."