Paul Romer
Encyclopedia
Paul Michael Romer is an American economist
, entrepreneur
, and activist. He is currently the Henry Kaufman Visiting Professor at New York University Stern School of Business
and will be joining NYU as a full time professor beginning in 2011. Prior to that, Romer was a Senior Fellow at Stanford University's
Center for International Development and the Stanford Institute for Economic Policy Research
, and a Non-Resident Fellow at the Center for Global Development
. He is an expert on endogenous growth theory
.
Romer earned a B.S.
in physics
in 1977 and a Ph.D.
in economics in 1983, both from the University of Chicago
. He taught at the University of California at Berkeley, the University of Chicago, and the University of Rochester. He was named one of America's 25 most influential people by Time Magazine in 1997,
and in 2000 started the online educational company Aplia
, which was purchased in 2007 by Cengage Learning
. Romer has been awarded the Horst Claus Recktenwald Prize in Economics in Nuremberg, Germany. He is the son of former Colorado Governor Roy Romer.
, for example, established the primacy of technological progress in accounting for sustained increases in output per worker. Romer's articles published in 1986 and 1990 amounted to constructing mathematical
representations of economies in which technological change
is the result of the intentional actions of people, such as research and development.
Romer is credited with the quote, "A crisis is a terrible thing to waste." which he said during a November 2004 venture-capitalist meeting in California. Although he was referring to the rapidly rising education levels in other countries versus the United States, the quote became a sounding horn by economists and consultants looking to make a positive take away from the economic downturn of 2007-2009.
His latest contribution has been in trying to replicate the success of charter cities
and make it an engine of economic growth. Romer has argued that with better rules and institutions, undeveloped nations can be set on a different and better trajectory for growth.
Every generation has perceived the limits to growth that finite resources and undesirable side effects would pose if no new recipes or ideas were discovered. And every generation has underestimated the potential for finding new recipes and ideas. We consistently fail to grasp how many ideas remain to be discovered. Possibilities do not add up. They multiply.”
--arguably a form of Basic Income Guarantee
.http://www.peoplescapitalism.org/references.cfm
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
, entrepreneur
Entrepreneur
An entrepreneur is an owner or manager of a business enterprise who makes money through risk and initiative.The term was originally a loanword from French and was first defined by the Irish-French economist Richard Cantillon. Entrepreneur in English is a term applied to a person who is willing to...
, and activist. He is currently the Henry Kaufman Visiting Professor at New York University Stern School of Business
New York University Stern School of Business
The Leonard N. Stern School of Business is New York University's business school. It was established in 1900 as the NYU School of Commerce, Accounts and Finance. In 1988 it was named after Leonard N. Stern, an alumnus and benefactor of the school...
and will be joining NYU as a full time professor beginning in 2011. Prior to that, Romer was a Senior Fellow at Stanford University's
Stanford University
The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San...
Center for International Development and the Stanford Institute for Economic Policy Research
Stanford Institute for Economic Policy Research
The Stanford Institute for Economic Policy Research is a nonpartisan economic research institution housed at Stanford University. It was founded in 1982 as a way to bring together economic scholars from different parts of the University. George Shultz was a key player in its inception...
, and a Non-Resident Fellow at the Center for Global Development
Center for Global Development
The Center for Global Development is a non-profit think tank based in Washington, D.C. that focuses on international development. It was founded in November 2001 by former senior U.S. official Edward W. Scott, director of the Peterson Institute for International Economics, C. Fred Bergsten, and...
. He is an expert on endogenous growth theory
Endogenous growth theory
Endogenous growth theory holds that economic growth is primarily the result of endogenous and not external force. In Endogenous growth theory investment in human capital, innovation and knowledge are significant contributors to economic growth. The theory also focus on positive externalities and...
.
Romer earned a B.S.
Bachelor of Science
A Bachelor of Science is an undergraduate academic degree awarded for completed courses that generally last three to five years .-Australia:In Australia, the BSc is a 3 year degree, offered from 1st year on...
in physics
Physics
Physics is a natural science that involves the study of matter and its motion through spacetime, along with related concepts such as energy and force. More broadly, it is the general analysis of nature, conducted in order to understand how the universe behaves.Physics is one of the oldest academic...
in 1977 and a Ph.D.
Doctorate
A doctorate is an academic degree or professional degree that in most countries refers to a class of degrees which qualify the holder to teach in a specific field, A doctorate is an academic degree or professional degree that in most countries refers to a class of degrees which qualify the holder...
in economics in 1983, both from the University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
. He taught at the University of California at Berkeley, the University of Chicago, and the University of Rochester. He was named one of America's 25 most influential people by Time Magazine in 1997,
and in 2000 started the online educational company Aplia
Aplia
Aplia Inc. is an educational technology company founded in 2000 by Stanford University professor Paul Romer that offers online homework products geared toward college-level courses. In March 2007 Cengage Learning acquired Aplia Inc...
, which was purchased in 2007 by Cengage Learning
Cengage Learning
Cengage Learning is a publisher of print and digital information services for the academic, professional and library markets, and delivers customized learning solutions for colleges, universities, professors, students, libraries, government agencies, corporations and professionals around the...
. Romer has been awarded the Horst Claus Recktenwald Prize in Economics in Nuremberg, Germany. He is the son of former Colorado Governor Roy Romer.
Academic contributions
Paul Romer's most important work is in the field of economic growth. Economists studied long-run growth extensively during the 1950s and 1960s. The work of Robert SolowRobert Solow
Robert Merton Solow is an American economist particularly known for his work on the theory of economic growth that culminated in the exogenous growth model named after him...
, for example, established the primacy of technological progress in accounting for sustained increases in output per worker. Romer's articles published in 1986 and 1990 amounted to constructing mathematical
Mathematics
Mathematics is the study of quantity, space, structure, and change. Mathematicians seek out patterns and formulate new conjectures. Mathematicians resolve the truth or falsity of conjectures by mathematical proofs, which are arguments sufficient to convince other mathematicians of their validity...
representations of economies in which technological change
Technological change
Technological change is a term that is used to describe the overall process of invention, innovation and diffusion of technology or processes. The term is synonymous with technological development, technological achievement, and technological progress...
is the result of the intentional actions of people, such as research and development.
Romer is credited with the quote, "A crisis is a terrible thing to waste." which he said during a November 2004 venture-capitalist meeting in California. Although he was referring to the rapidly rising education levels in other countries versus the United States, the quote became a sounding horn by economists and consultants looking to make a positive take away from the economic downturn of 2007-2009.
His latest contribution has been in trying to replicate the success of charter cities
Charter city
A charter city is a city in which the governing system is defined by the city's own charter document rather than by state, provincial, regional or national laws. In locations where city charters are allowed by law, a city can adopt or modify its organizing charter by decision of its administration...
and make it an engine of economic growth. Romer has argued that with better rules and institutions, undeveloped nations can be set on a different and better trajectory for growth.
Dominant theme
“Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable. A useful metaphor for production in an economy comes from the kitchen. To create valuable final products, we mix inexpensive ingredients together according to a recipe. The cooking one can do is limited by the supply of ingredients, and most cooking in the economy produces undesirable side effects. If economic growth could be achieved only by doing more and more of the same kind of cooking, we would eventually run out of raw materials and suffer from unacceptable levels of pollution and nuisance. History teaches us, however, that economic growth springs from better recipes, not just from more cooking. New recipes generally produce fewer unpleasant side effects and generate more economic value per unit of raw material.Every generation has perceived the limits to growth that finite resources and undesirable side effects would pose if no new recipes or ideas were discovered. And every generation has underestimated the potential for finding new recipes and ideas. We consistently fail to grasp how many ideas remain to be discovered. Possibilities do not add up. They multiply.”
Publications
- "Growth Cycles", with George Evans and Seppo Honkapohja (American Economic ReviewAmerican Economic ReviewThe American Economic Review is a peer-reviewed academic journal of economics publishing seven issues annually by the American Economic Association. First published in 1911, it is considered one of the most prestigious journals in the field. The current editor-in-chief is Penny Goldberg . The...
, June 1998). Jstor link - "Preferences, Promises, and the Politics of Entitlement" (Individual and Social Responsibility: Child Care, Education, Medical Care, and Long-Term Care in America, Victor R. Fuchs (ed.), Chicago: University of Chicago Press, 1995).
- "New Goods, Old Theory, and the Welfare Costs of Trade Restrictions," Journal of Development Economics, No. 43 (1994), pp. 5–38.
- "Looting: The Economic Underworld of Bankruptcy for Profit" with George Akerlof (Brookings Papers on Economic Activity 2, William C. Brainard and George L. Perry (eds.), 1993, pp. 1–74). Jstor link
- "Economic Integration and Endogenous Growth," with Luis Rivera-Batiz (Quarterly Journal of Economics CVI, May 1991, pp. 531–55). Jstor link
- "Endogenous Technological Change" (Journal of Political EconomyJournal of Political EconomyThe Journal of Political Economy is an academic journal run by economists at the University of Chicago and published every two months by the University of Chicago Press. The journal publishes articles in both theoretical economics and empirical economics...
, October 1990). Jstor link - "Increasing Returns and Long Run Growth" (Journal of Political Economy, October 1986). Jstor link
- "Cake Eating, Chattering and Jumps: Existence Results for Variational Problems" (Econometrica 54, July 1986, pp. 897–908). Jstor link
Influences
Romer has influenced the "People's Capitalism" concept put forth by James S. AlbusJames S. Albus
James Sacra Albus was an American engineer, Senior NIST Fellow and founder and former chief of the Intelligent Systems Division of the Manufacturing Engineering Laboratory at the National Institute of Standards and Technology .- Biography :Born in Louisville Ky., Albus received the B.S...
--arguably a form of Basic Income Guarantee
Basic income
A basic income guarantee is a proposed system of social security, that regularly provides each citizen with a sum of money. In contrast to income redistribution between nations themselves, the phrase basic income defines payments to individuals rather than households, groups, or nations, in order...
.http://www.peoplescapitalism.org/references.cfm