Paul Romer | |
|---|---|
 Romer in 2005 | |
| Chief Economist of the World Bank | |
| In office October 2016 – January 24, 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 69) Denver, Colorado, U.S. |
| Education | Phillips Exeter AcademyUniversity of Chicago(SB,PhD) Massachusetts Institute of Technology Queen's University |
| Awards | Nobel Memorial Prize in Economic Sciences(2018) |
| Website | Official website |
| 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 |
Paul Michael Romer (born November 6, 1955)[1] is an American economist andpolicy entrepreneur who is aSeidner University Professor in Finance atBoston College.[2] Romer is best known as the formerChief Economist of the World Bank and forco-receiving the 2018Nobel Memorial Prize in Economic Sciences (shared withWilliam Nordhaus) for his work inendogenous growth theory.[3] He also coined the term "mathiness," which he describes as misuse of mathematics in economic research.
Before joiningBoston College, Romer was a professor atNYU, theUniversity of Chicago, theUniversity of California, Berkeley,Stanford University'sGraduate School of Business,[4] and theUniversity of Rochester.[5][6] Romer waschief 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.[7][8] Romer took leave from his position as professor of economics atNYU when he joined theWorld Bank, and returned toNYU after his term. In addition, he has also been a researcher at theNational Bureau of Economic Research,Stanford's Center for International Development, theStanford Institute for Economic Policy Research, theHoover Institution, as well as a fellow at theAmerican Academy of Arts and Sciences and theCenter for Global Development.[5][9]
Romer was born to former Colorado governorRoy Romer and Beatrice "Bea" Miller. He has four brothers and two sisters. One of his brothers,Chris Romer, is a former Colorado state senator.[10]
He graduated in 1973[11] fromPhillips Exeter Academy. He earned his Bachelor of Science in mathematics[12] and aPhD in economics in 1983,[1] both from theUniversity of Chicago, after graduate studies atMassachusetts Institute of Technology from 1977 to 1979 and atQueen's University (Kingston, Canada) from 1979 to 1980.[13]
Romer's most important work is in the field of economic growth, and he has made important contributions in the development ofendogenous growth theory. He was named one of America's 25 most influential people byTime magazine in 1997,[14] and he was awarded theHorst Claus Recktenwald Prize in Economics in 2002. In 2015, he was recipient of the John R. Commons Award, given by the economics honor societyOmicron Delta Epsilon.[15]
Romer's research on economic growth followed extensive studies of long-run growth during the 1950s and 1960s.[16] TheSolow–Swan model, for example, established the primacy of technological progress in accounting for sustained increases in output per worker. His 1983dissertation, supervised byJosé Scheinkman andRobert Lucas Jr., showed mathematical models of economies in whichtechnological change resulted from intentional actions of people, such as research and development. It led to twoJournal of Political Economy articles published in 1986 and 1990, which startedendogenous growth theory.
Romer taught at theUniversity of Rochester, theUniversity of Chicago, theUniversity of California, Berkeley,Stanford University andNew York University. AtNew York University, he founded the Marron Institute of Urban Management. Its objective is to assist cities in planning its future developments, specifically improving the safety, health, and mobility of citizens.[5]
Romer temporarily left academia in 2001 to foundAplia, a company which produces onlineproblem sets for college students. Students have submitted upwards of 2.4 billion answers to homework problems on the Aplia website. Aplia was purchased in 2007 byCengage 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 theGreat Recession.[17]
Romer has attempted to replicate the success ofcharter cities and make them an engine of economic growth in developing countries. He promoted this idea in aTED talk in 2009,[18] and he has argued that with better rules and institutions less developed nations can be set on a different and better trajectory for growth.[19] 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.[10]
The government ofHonduras considered creating charter cities (calledZone for Employment and Economic Development), though without the oversight of a third-party government, which some argue isneo-colonialism.[10] 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.[20]
He becameWorld Bank Chief Economist in October 2016. He resigned on January 24, 2018,[7][8] following a controversy in which he stated in an interview withThe Wall Street Journal on January 12,[21][8] that during the tenure of Chile'ssocialist PresidentMichelle Bachelet from 2014 onwards, Chile's ranking for ease of doing business had been downgraded by theWorld Bank as a result of changes of methodology which he claimed may have been politically motivated,[8] a claim denied by the former World Bank economist responsible for compiling Chile's ranking, Chilean economist Augusto Lopez-Claros.[22][23]
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Romer shared the 2018 Prize withWilliam Nordhaus.[24] In choosing Romer as one of the 2018 economics laureates, theRoyal 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."[3]
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."[25]
The same day he received the award, Romer marriedCaroline Weber, a professor of French Literature at Barnard College.[26]
In June 2024, 16Nobel Prize in Economics laureates, including Romer, signed an open letter arguing thatDonald Trump’s fiscal and trade policies coupled with efforts to limit theFederal Reserve's independence would reignite inflation in the United States.[27][28][29]
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.
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."
Trump's policies could prove to be inflationary, other economists also warned, such as his proposal to create a 10% across-the-board tariff on all imports to deporting immigrants. The tariff plan would add $1,700 in annual costs for the typical U.S. household, essentially acting as an inflationary tax, according to experts at the Peterson Institute for International Economics.
Media related toPaul Romer at Wikimedia Commons
including his Prize Lecture December 8, 2018On the Possibility of Progress| Diplomatic posts | ||
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| Preceded by | Chief Economist of the World Bank 2016–2018 | Succeeded by |
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