Paul Romer

Economic growth springs from better recipes, not just from more cooking.

Paul Michael Romer (born November 7, 1955) is an American economist, a pioneer of endogenous growth theory, and a co-recipient of the 2018 Nobel Memorial Prize in Economic Sciences. He received the prize "for integrating technological innovations into long-run macroeconomic analysis". He previously served as Chief Economist of the World Bank between 2016 and 2018.

Quotes

• A crisis is a terrible thing to waste.
  • Discussing rapidly-increasing education levels and competition from countries outside of the United States in a 2004 venture capital meeting in California, as quoted in "A Terrible Thing to Waste." The New York Times Magazine. July 31, 2009.

About the quote: Even though Romer made this statement approximately four years before the 2008 Financial Crisis and the subsequent Great Recession, policy makers repeated the idea frequently during the Crisis and the Recession as a reminder that necessary economic and financial reforms which were previously politically impossible were now quite feasible. (See, for example, "A Crisis Is a Terrible Thing to Waste," Stanford Social Innovation Review, July 21, 2010).

• We've maintained accelerating growth over time [in part because of] changes in our institutions. We have things like universities . . . patent laws, [and] research grants which have created incentives for those individuals [who develop innovations] to engage in more discovery. . . . [T]he rules of the game create incentives . . .
  • EconTalk podcast hosted by Russ Roberts. "Romer on Growth" (quote starts at 20 minutes, 02 seconds) Sponsored by Liberty Fund's Library of Economics and Liberty. Podcast release date: August 27, 2007.

• Presenting a model is like doing a card trick. Everybody knows that there will be some sleight of hand. There is no intent to deceive because no one takes it seriously. Perhaps our norms will soon be like those in professional magic; it will be impolite, perhaps even an ethical breach, to reveal how someone’s trick works.

• Economic growth springs from better recipes, not just from more cooking. New recipes produce fewer unpleasant side effects and generate more economic value per unit of raw material.
  • As quoted in "World Bank confirms NYU's Romer as next chief economist" Reuters. July 18, 2016.

• The question that I first asked was, why was progress . . . speeding up over time? It arises because of this special characteristic of an idea, which is if [a million people try] to discover something, if any one person finds it, everybody can use the idea.
  • After learning that he was one of two recipients of the 2018 Nobel Memorial Prize in Economic Sciences, as quoted in "Two Top U.S. Economists Win Nobel for Work on Growth and Climate: Research of William D. Nordhaus and Paul M. Romer has had immense impact on global policy making, the Academy says" The Wall Street Journal. October 8, 2018.

• Many people think that dealing with protecting the environment will be so costly and so hard that they just want to ignore the problem. I hope the prize today could help everyone see that humans are capable of amazing accomplishments when we set about trying to do something.
  • At a news conference following the 2018 Nobel Memorial Prize in Economics announcement, as quoted in "2 Americans win econ Nobel for work on climate and growth" Associated Press. October 8, 2018.

• The amazing thing about cities is that they're worth so much more than it costs to build them.
  • TED 2011 "The world's first charter city?"

Quotes about Romer

• You will almost never see an economist whom the academics themselves regard as important or interesting. For example, niether Robert Lucas, without question the most influential economic theorist of the 1970s, nor Paul Romer, arguably the most influential theorist of the 1980s, has ever appeared on any public affairs program.
  • Paul Krugman, Peddling Prosperity (1994), Introduction: Looking for Magicians

• Romer demonstrates how knowledge can function as a driver of long-term economic growth. . . . Previous macroeconomic research had emphasised technological innovation as the primary driver of economic growth, but had not modelled how economic decisions and market conditions determine the creation of new technologies. Paul Romer solved this problem by demonstrating how economic forces govern the willingness of firms to produce new ideas and innovations.
  • Press release announcing Romer as one of two recipients of the Nobel Memorial Prize in Economics for 2018 Royal Swedish Academy of Sciences. October 8, 2018.

• Paul's insight is that the infrastructure for creating new ideas is the engine room of economic growth. So we need to pay attention to patents, the number of scientists that are out there, the incentives to do science. And as long as we can keep generating new ideas, we can keep generating economic growth.
  • Justin Wolfers, professor of economics and public policy at the University of Michigan, as quoted in "2 American Economists Win 2018 Nobel Memorial Prize In Economics". National Public Radio's news program Morning Edition. October 8, 2018.

External links

• Paul Romer biography at New York University's Stern School of Business