It interests me when questionable but long-unquestioned business practices attract fresh scrutiny and then, surprisingly quickly, transition from being ignored or tolerated to being generally denounced. I suspect this type of attitude shift is happening now in the context of conflicts of interest confronting academic economists. Such conflicts can arise when, for instance, a distinguished economist testifies before Congress, is interviewed in the press, or otherwise weighs in on policy debates without disclosing that, in addition to his academic affiliation, he also has financial/professional ties that may color (or appear to color) his objectivity.
Several recent developments have drawn attention to the issue.
First, there’s Inside Job, a documentary film that explores the causes of the financial crisis and deals harshly with high-profile academic economists who had undisclosed financial ties. For example, the film includes a painful-to-watch interview (available online) in which Frederic Mishkin, a professor at Columbia University’s Graduate School of Business and a former Federal Reserve Governor, reluctantly admits that Iceland’s Chamber of Commerce paid him $124,000 to write a paper endorsing the country’s stable business environment, a fact not disclosed in the paper.
Next, there’s Financial Economists, Financial Interests and Dark Corners of the Meltdown: It’s Time to Set Ethical Standards for the Economics Profession (available online), a research paper in which two University of Massachusetts scholars review publicly available information about 19 prominent economists. The UMass scholars found, among other things, that when writing articles, granting interviews, or providing testimony on policy matters, the economists typically identified themselves only by reference to their academic positions, without mentioning Wall Street ties.
One example cited in