Bashing apart the idea of diminishing returns - the economic theory that
states that growth has its limits - Paul Romer is championing the
economics of ideas. In Romer's view, it's new ideas and new technologies
that drive growth. So far, he's been right.
Author Kevin Kelly on Paul Romer:
Read the newspaper or crack open the average business magazine and you
wouldn't think economics is undergoing revolutionary change. Instead you
get the latest on Fed policy, simplistic analysis of some trade dispute,
maybe a diatribe against downsizing with reference to some theory of
competitiveness. On Sunday chat shows, folks like Robert Reich and James
Fallows pratter about the economy, and say little that's original.
Like most of us, I didn't think economists had many new things to say.
That was before meeting Paul Romer. It turns out, economics is being
transformed by the very forces that are revolutionizing our day-to-day
lives. And the theoretical father of this transformation is Paul Romer.
Unlike many of his colleagues who see the computer as just another
capital good, Romer takes the power of technology seriously. He's
thought hard about how biotech and other innovations have (and will)
transformed our economy. As a result, he's hit on a theoretical and
intellectually rigorous economics for the technological age. Romer's
shifting economics away from the dismal, away from a fetish with
diminishing returns and scarcity, and infused the profession with
optimism and the possibility of progress.
Paul Romer knows there's no scarcity of ideas.
Don't expect to see Romer on TV anytime soon, though. He doesn't speak
in sound bites and doesn't hew to some easily categorized political
line. But if you want to learn something about where the world is going,
look hard for his writings. They aren't always easy to read. But if you
appreciate learning something new, he never lets you down.