Date: January 2015
Creator: Cochran, Kendall P.
Description: Adam Smith published The Theory of Moral Sentiments in 1759 and established the ethical foundation for The Wealth of Nations (1776) as well as the important role played by custom and fashion in shaping behaviors and outcomes. Kendall P. Cochran believed in Smith’s emphasis on value-driven analysis and seeking solutions to major problems of the day. Cochran believed that economists moved too far in the direction of analysis free of words like ought and should and devoted his career to establishing that economics is a moral science. A recent study by two Harvard professors, Carmen Reinhart and Kenneth Rogoff, Growth in a Time of Debt (2010), asserted that healthy economic growth and high levels of government debt are incompatible. These conclusions are associated with the austerity movement, which calls for policymakers to reduce government spending in order to reduce the government’s debt and improve long-term growth prospects. The austerity movement has been used to justify the sharp decline in public sector employment that has restrained job growth since the recession of 2007. In 2013, a graduate student named Thomas Herndon discovered an error in the calculations of Reinhart and Rogoff, publishing his findings in a paper co-authored by his professors, ...
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