Economists urge AEA to adopt ethics code: letter

Almost three hundred economists have signed a letter to the American Economic Association "strongly" urging it to adopt a code of ethics requiring disclosure of potential conflicts of interests.

The 135-year-old American Economic Association, or AEA, does not have a code of conduct for its approximately 18,000 members. Over half of its members are academics, according to its website.

"We strongly urge that the AEA create and then promote adherence to a professional code of ethics that at a minimum requires transparency with respect to potential conflicts of interest," Gerald Epstein and Jessica Carrick-Hagenbarth of the University of Massachussetts, Amherst wrote in a letter sent Monday to the AEA.

"We believe this would be an important and necessary step toward enhancing the credibility and integrity of the profession," they wrote.

The letter was signed by 292 economists, including former White House advisor Christina Romer and Nobel Laureate George Akerlof.

The letter suggests an ethical code should require economists to disclose financial ties and relevant personal or professional relationships that may have the appearance or potential for a conflict of interest in public speeches and writing.

The issue has recently garnered more attention after the financial crisis and the documentary film "Inside Job" highlighted economists' potentially conflicting roles.

The letter cited Epstein and Carrick-Hagenbarth's study of 19 financial economists that found the majority did not reveal private financial affiliations.

It also cited a Reuters study of Congressional testimony, that found that roughly a third of academics testifying on financial regulatory reform did not reveal their financial ties. The Reuters special report analyzed the testimonies of almost 100 academics between late 2008 and early 2010.

Epstein and Carrick-Hagenbarth wrote that they anticipated some pushback, including arguments that many academic economists are already subject to conflict of interest policies by their universities.

"But these codes primarily proscribe conduct that would conflict with the interests of their universities and do not address potential conflicts with respect to the broader public or government," they said.

Others may think that listing their paid positions on the resumes is sufficient, they said. The letter writers added that they did not agree with this view.

"It is not reasonable to expect the public to look up each expert's CV and biography when trying to assess their statements," they wrote.

The AEA will discuss ethics at its annual conference in January, according to an email obtained by Reuters from an AEA executive committee member.

In a separate email to reporters, AEA President Robert Hall said that historically the AEA has declined to adopt a code of conduct as it lacks sanction powers over its members.

"Like my predecessors, I'm skeptical that the AEA is well positioned to cure any ethical lapses that economists may be committing outside the AEA itself," Hall wrote. "Still, the topic might benefit from further discussion within the organization."

[Source: By Kristina Cooke, Reuters, New York, 03Jan11]

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