Paul Romer

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Paul Romer
Paul Romer in 2005.jpg
Chief Economist of the World Bank
In office
October 2016 24 January 2018
President Jim Yong Kim
Preceded by Kaushik Basu
Succeeded by Shanta Devarajan (Acting)
Personal details
Born
Paul Michael Romer

(1955-11-06) November 6, 1955 (age 63) [1]
Denver, Colorado, U.S.
Education Phillips Exeter Academy University of Chicago (BSc, MA, PhD)
Massachusetts Institute of Technology
Queen's University
Awards Nobel Memorial Prize in Economic Sciences (2018)
Scientific career
Fields Economics
Institutions New York University
Stanford University
UC Berkeley
University of Chicago
University of Rochester
Thesis Dynamic competitive equilibria with externalities, increasing returns and unbounded growth  (1983)
Doctoral advisor José Scheinkman
Robert Lucas Jr.
Other academic advisors Russell Davidson
Ivar Ekeland
Doctoral students Sérgio Rebelo
Maurice Kugler
Influences Joseph Schumpeter
Robert Solow

Paul Michael Romer (born November 6, 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". [2]

Economist professional in the social science discipline of economics

An economist is a practitioner in the social science discipline of economics.

Endogenous growth theory

Endogenous growth theory holds that economic growth is primarily the result of endogenous and not external forces. Endogenous growth theory holds that investment in human capital, innovation, and knowledge are significant contributors to economic growth. The theory also focuses on positive externalities and spillover effects of a knowledge-based economy which will lead to economic development. The endogenous growth theory primarily holds that the long run growth rate of an economy depends on policy measures. For example, subsidies for research and development or education increase the growth rate in some endogenous growth models by increasing the incentive for innovation.

Technological innovation is an extended concept of innovation. While innovation is a rather-well defined concept, it has a broad meaning to many people, and especially numerous understanding in the academic and business world.

Contents

Romer was Chief Economist and Senior Vice President of the World Bank until he resigned in January 2018 following a controversy arising from his claim of possible political manipulation of Chile's "ease of doing business" ranking. [3] [4] He had been on leave from his position as professor of economics at the Stern School of Business at New York University. [5]

The World Bank Chief Economist provides intellectual leadership and direction to the Bank’s overall development strategy and economic research agenda, at global, regional and country levels.

Chile republic in South America

Chile, officially the Republic of Chile, is a South American country occupying a long, narrow strip of land between the Andes to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far south. Chilean territory includes the Pacific islands of Juan Fernández, Salas y Gómez, Desventuradas, and Easter Island in Oceania. Chile also claims about 1,250,000 square kilometres (480,000 sq mi) of Antarctica, although all claims are suspended under the Antarctic Treaty.

New York University private research university in New York, NY, United States

New York University (NYU) is a private research university spread throughout the world. Founded in 1831, NYU's historical campus is in Greenwich Village, New York City. As a global university, students can graduate from its degree-granting campuses in NYU Abu Dhabi and NYU Shanghai, as well as study at its 12 academic centers in Accra, Berlin, Buenos Aires, Florence, London, Los Angeles, Madrid, Paris, Prague, Sydney, Tel Aviv, and Washington, D.C.

Prior to New York University, Romer was a professor of economics at the University of Chicago, the University of California, Berkeley, the Stanford University's Graduate School of Business, and the University of Rochester. [6] [7] In addition, he was a senior fellow at Stanford's Center for International Development, the Stanford Institute for Economic Policy Research, the Hoover Institution, as well as a fellow at the Center for Global Development. [6] [8]

University of Chicago Private research university in Chicago, Illinois, United States

The University of Chicago is a private research university in Chicago, Illinois. The university is composed of an undergraduate college, various graduate programs and interdisciplinary committees organized into five academic research divisions and seven professional schools. Beyond the arts and sciences, Chicago is also well known for its professional schools, which include the Pritzker School of Medicine, the Booth School of Business, the Law School, the School of Social Service Administration, the Harris School of Public Policy Studies, the Divinity School and the Graham School of Continuing Liberal and Professional Studies. The university holds top-ten positions in various national and international rankings.

University of California, Berkeley Public university in California, USA

The University of California, Berkeley is a public research university in the United States. Located in the city of Berkeley, it was founded in 1868 and serves as the flagship institution of the ten research universities affiliated with the University of California system. Berkeley has since grown to instruct over 40,000 students in approximately 350 undergraduate and graduate degree programs covering numerous disciplines.

Stanford University private research university located in Stanford, California, United States

Leland Stanford Junior University is an American private research university in Stanford, California. Stanford is known for its academic strength, wealth, proximity to Silicon Valley, and ranking as one of the world's top universities.

Early life and education

Romer was born to former Colorado governor Roy Romer and Beatrice "Bea" Miller. He has four brothers and two sisters. One of his brothers, Chris Romer, is a former Colorado state senator. [9]

Roy Romer American politician

Roy Rudolf Romer is an American politician, who served as the 39th Governor of Colorado and served as the superintendent of the Los Angeles Unified School District from 2000 to 2006.

Chris Romer American politician

Chris Romer is a former politician of the U.S. state of Colorado. Elected to the Colorado State Senate as a Democrat in 2006, he represented Senate District 32, which encompasses south Denver.

He graduated from Phillips Exeter Academy, and earned a B.S. in [[mathematics]In his Nobel lecture, he says his undergraduate major was in Physics, [10] ] in 1977 and a MA in economics in 1978 as well as a Ph.D. in economics in 1983, [1] all from the University of Chicago, after graduate studies at Massachusetts Institute of Technology and Queen's University. [11]

Phillips Exeter Academy American private college preparatory school

Phillips Exeter Academy is a coeducational independent school for boarding and day students in grades 9 through 12, and offers a postgraduate program. Located in Exeter, New Hampshire, it is one of the oldest secondary schools in the United States. Exeter is based on the Harkness education system, a conference format of student interaction with minimal teacher involvement. It has the largest endowment of any New England boarding school, which as of June 30, 2017, was valued at $1.25 billion. On January 25, 2019, William K. Rawson was appointed by the Academy's trustees as the 16th Principal Instructor. He is the 4th alumnus of Exeter to serve as Principal Instructor, after Gideon Lane Soule (1838–1873), Harlan Amen, and William Saltonstall (1946–1963).

A Bachelor of Science is an undergraduate academic degree awarded for completed courses that generally last three to five years, or a person holding such a degree.

A Master of Arts is a person who was admitted to a type of master's degree awarded by universities in many countries, and the degree is also named Master of Arts in colloquial speech. The degree is usually contrasted with the Master of Science. Those admitted to the degree typically study linguistics, history, communication studies, diplomacy, public administration, political science, or other subjects within the scope of the humanities and social sciences; however, different universities have different conventions and may also offer the degree for fields typically considered within the natural sciences and mathematics. The degree can be conferred in respect of completing courses and passing examinations, research, or a combination of the two.

Career

Romer's most important work is in the field of economic growth, and he has made vital contributions in the development of endogenous growth theory. He was named one of America's 25 most influential people by Time magazine in 1997, [12] and he was awarded the Horst Claus Recktenwald Prize in Economics in 2002. Iin 2015 he received The John R. Commons Award from Omicron Delta Epsilon, the economics honor society. [13]

Time is an American weekly news magazine and news website published in New York City. It was founded in 1923 and originally run by Henry Luce. A European edition is published in London and also covers the Middle East, Africa, and, since 2003, Latin America. An Asian edition is based in Hong Kong. The South Pacific edition, which covers Australia, New Zealand, and the Pacific Islands, is based in Sydney. In December 2008, Time discontinued publishing a Canadian advertiser edition.

The H. C. Recktenwald Prize in Economics was awarded to several academic economists from 1995 to 2004. It is named for Prof. Horst Claus Recktenwald, a German economist, and was endowed by his wife, Hertha Recktenwald, after his death.

Academia

Romer's research on economic growth followed extensive studies of long-run growth during the 1950s and 1960s. [14] The Solow–Swan model, for example, established the primacy of technological progress in accounting for sustained increases in output per worker. His 1983 dissertation, supervised by José Scheinkman and Robert Lucas Jr., 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. It led to two Journal of Political Economy articles published in 1986 and 1990, respectively, which started endogenous growth theory.

He taught at the University of Rochester, the University of Chicago, the University of California, Berkeley, Stanford University and New York University. [6]

He was appointed Honorary Professor at East China Normal University in 2013. [15]

Business

Romer temporarily left academia in 2001 to found Aplia, a company which produces online problem sets for college students; Aplia was purchased in 2007 by Cengage Learning.

He 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 compared to the United States, the quote became a rallying concept for economists and consultants looking for constructive opportunities amid the Great Recession. [16]

Charter cities

Romer has attempted to replicate the success of charter cities and make them an engine of economic growth in developing countries. He promoted this idea in a TED talk in 2009, [17] and he has argued that with better rules and institutions less developed nations can be set on a different and better trajectory for growth. [18] In his model, a host country would turn responsibility for a charter city over to a more developed trustee nation, which would allow for new rules of governance to emerge. People could "vote with their feet" for or against these rules. [9]

The government of Honduras considered creating charter cities, though without the oversight of a third-party government, which some argue is neo-colonialism. [9] Romer served as chair of a "transparency committee" but resigned in September 2012 when the Honduran government agency responsible for the project signed agreements with international developers without involvement of the committee. [19]

World Bank

He became World Bank Chief Economist in October 2016. He resigned on 24 January 2018, [3] [4] following a controversy in which he stated in an interview with The Wall Street Journal on January 12, [20] [4] that during the tenure of Chile's socialist President Michelle Bachelet from 2014 onwards, Chile's ranking for ease of doing business had been downgraded by the World Bank as a result of changes of methodology which he claimed may have been politically motivated, [4] a claim denied by the former World Bank economist responsible for compiling Chile's ranking, Chilean economist Augusto Lopez-Claros. [21] [22]

Nobel Memorial Prize in Economics

Paul Romer during Nobel press conference in Stockholm, December 2018 Paul Romer EM1B6039 (46234134401).jpg
Paul Romer during Nobel press conference in Stockholm, December 2018

Romer shared the 2018 Nobel Prize with William Nordhaus. [23] In choosing Romer as one of the 2018 economics laureates, the Royal Swedish Academy of Sciences stated that he had shown "how knowledge can function as a driver of long-term economic growth. . . . [Prior macroeconomic studies] 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." [2]

After receiving the prize, Romer described how he started thinking about the relationship between growth and innovation: "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." [24]

The same day he received the Nobel award, Romer married Caroline Weber, a professor of French Literature at Barnard College. [25]

Publications

See also

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References

  1. 1 2 Romer, Paul Michael (1983). Dynamic competitive equilibria with externalities, increasing returns and unbounded growth (Ph.D.). The University of Chicago. OCLC   28795806 via ProQuest. (Subscription required (help)).
  2. 1 2 "The Prize in Economic Sciences 2018 Press Release" (PDF). Nobelprize.org . October 8, 2018.
  3. 1 2 Donnan, Shawn (January 25, 2018). "Outspoken World Bank chief economist Paul Romer exits: Emails reveal clashes over issues ranging from grammar to methodology". Financial Times.
  4. 1 2 3 4 "World Bank economist Paul Romer quits after Chile comments". Reuters. 24 January 2018. Retrieved 8 October 2018.
  5. "N.Y.U. Lands Top Economist for Cities Project". New York Times . 2011-05-27. Retrieved 2011-05-27.
  6. 1 2 3 "CV (PAUL M. ROMER)" (PDF).
  7. "Paul Romer". paulromer.net. Retrieved 2018-10-08.
  8. "Risk and Return". Hoover Digest. No. 2. 1996. Archived from the original on 2012-08-02.
  9. 1 2 3 "The Politically Incorrect Guide to Ending Poverty". The Atlantic . July–August 2010.
  10. see https://www.nobelprize.org/prizes/economic-sciences/2018/romer/lecture/ At 7 minutes into the lectue
  11. Warsh, David (2007). Knowledge and the Wealth of Nations. New York: Norton. pp. 196–201. ISBN   978-0-393-32988-9.
  12. "Time's 25 Most Influential Americans". Time Magazine . Time Inc. 1997-04-21. Retrieved 2007-12-21.
  13. https://www.omicrondeltaepsilon.org/awards.html
  14. Solow, Robert M. (1994). "Perspectives on Growth Theory". Journal of Economic Perspectives . 8 (1): 45–54. doi:10.1257/jep.8.1.45. JSTOR   2138150.
  15. http://english.ecnu.edu.cn/5e/63/c1706a24163/page.htm
  16. Rosenthal, Jack (2009-07-31). "A Terrible Thing to Waste". The New York Times. Retrieved 2011-10-09.
  17. Paul Romer: Why the world needs charter cities, TED talk August 2009
  18. Gunn, Dwyer (2009-09-29). "Can "Charter Cities" Change the World? A Q&A With Paul Romer". The New York Times. Retrieved 2010-05-22.
  19. "Plan for Charter City to Fight Honduras Poverty Loses Its Initiator". New York Times. 30 September 2012.
  20. Josh Zumbrun; Ian Talley (12 January 2018). "World Bank Unfairly Influenced Its Own Competitiveness Rankings". Wall Street Journal. Retrieved 8 October 2018.
  21. "Chile complains of World Bank unfair treatment". BBC. 15 January 2018. Retrieved 8 October 2018. In an interview given to the Chilean newspaper El Mercurio, the World Bank economist who had been responsible for the rankings, Augusto Lopez-Claros, said changes in methodology "took place in a transparent and open context," denying any political bias.
  22. Oscar Medina; Andrew Rosati (13 January 2018). "World Bank to Probe Chile's Business Ranking After Bias Alleged". Bloomberg. Retrieved 8 October 2018. Chilean economist Augusto Lopez-Claros, who was in charge of compiling Chile’s ranking for the World Bank report, said accusations of political manipulation were “wholly without merit.”
  23. Appelbaum, Binyamin (October 8, 2018). "2018 Nobel in Economics Awarded to William Nordhaus and Paul Romer". The New York Times.
  24. Kiernan, Paul; Sugden, Joanna (October 8, 2018). "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.
  25. https://www.nytimes.com/2018/12/11/fashion/weddings/paul-romer-wins-nobel-prize-and-marries-on-same-day.html
Diplomatic posts
Preceded by
Kaushik Basu
Chief Economist of the World Bank
2016–2018
Succeeded by
Shanta Devarajan
Acting