Prize lecture: Paul M. Romer, Prize in Economic Sciences 2018

Transcript

Paul Romer was born in 1955 in Denver Colorado he received his PhD from University of Chicago but unlike professor nor house Paul moved around quite a bit University of Rochester back to University of Chicago University of California Berkeley Stanford University New York University where you are currently the research question there as we already k... Read More

Summary

In this video, Paul Romer, a Nobel laureate in Economics, discusses the concept of progress and how it is driven by the accumulation of ideas. He explores the tension between scarce resources and the positive force of discovery and innovation. Romer also emphasizes the importance of technological change and the role of cities in fostering interaction and learning. He suggests that human progress, which involves treating others as allies rather than rivals, is crucial for global development. Romer concludes by urging young people to pursue careers in science and economics to further explore the broader notions of progress.

Questions & Answers

Q: How did Paul Romer explain why progress was doubted in the past?

Paul Romer explained that in the past, progress was doubted due to several factors. One of them was the negative side effects of technological discoveries, such as the harmful effects of chlorofluorocarbons on the ozone layer. Other examples include the negative effects of DDT, leaded gasoline, and cigarette smoking. These unintended consequences raised concerns about the true positivity of technological progress.

Q: How did Paul Romer challenge Thomas Malthus' theory of growth?

Paul Romer challenged Thomas Malthus' theory of growth by focusing on the accumulation of ideas as a source of progress. Malthus' theory suggested that there is a finite quantity of every natural resource, which would limit the possibility of sustained progress. However, Romer argued that ideas, represented as codified knowledge, can be copied and shared, allowing for the discovery of new technologies and solutions. This accumulation of ideas offsets the scarcity implied by Malthusian analysis and opens up the possibility of sustained progress.

Q: How did Paul Romer describe the concept of human progress?

Paul Romer described human progress as progress in who we are, rather than just progress in what we have. He emphasized the importance of seeing other people, even animals, as part of "us" rather than "them." This broader notion of progress involves treating others as allies and expanding the circle of "us" to include more people. Romer argued that this type of progress is necessary for moral reasons and can lead to a more harmonious and prosperous society.

Q: What are the two practical policy applications that Paul Romer outlined?

Paul Romer outlined two practical policy applications. The first one is to think of cities as opportunities for people, especially in the developing world, to benefit from interaction and learning from others. He suggested that laying out cities with a plan that includes public spaces and connectivity can contribute to successful urbanization and the spread of ideas. The second application is related to raising productivity and attracting more people to science. Romer discussed the importance of investing in scientific research and creating an environment that encourages more individuals to pursue careers in science.

Q: How did Paul Romer address the challenge of global warming?

Paul Romer acknowledged the seriousness of the challenge posed by global warming but emphasized that it is ultimately a decision-making challenge rather than a physical or resource-related one. He compared it to other decisions, such as switching to daylight savings or changing traffic rules, that require a collective agreement. Romer emphasized the need to appeal to different parts of human nature and to find ways to motivate individuals and societies to make the necessary decisions to address global warming effectively.