As many of you are likely aware, Paul Romer and William Nordhaus won this year’s Nobel Prize in Economics. There has been heavy coverage of both economists and their work, and I am far from an expert in the field, so I do not have much to add. However, I want to quickly highlight some of the better articles I’ve seen on their work.
The always excellent Kevin Bryan has a wonderful write-up in A Fine Theorem.
I especially like how he ties together Romer’s and Nordhaus’ ideas here:
The connection between the very frontier of endogenous growth models, and environmental IAMs, has not gone unnoticed by other scholars. Nordhaus IAMs tend to have limited incorporation of endogenous innovation in dirty or clean sectors. But a fantastic paper by Acemoglu, Aghion, Bursztyn, and Hemous combines endogenous technical change with Nordhaus-type climate modeling to suggest a middle ground between Stern and Nordhaus: use subsidies to get green energy close to the technological frontier, then use taxes once their distortion is relatively limited because a good green substitute exists. Indeed, since this paper first started floating around 8 or so years ago, massive subsidies to green energy sources like solar by many countries have indeed made the “cost” of stopping climate change much lower than if we’d relied solely on taxes, since now production of very low cost solar, and mass market electric cars, is in fact economically viable.
Tyler Cowen and Alex Tabarrok also have some great stuff over at Marginal Revolution.
Perhaps the best bit is Tabarrok’s wonderful video on Romer:
Cowen also has two whole posts on the topic. The best bit on Romer is actually this wonderful compilation of relevant information:
Here is Romer on Twitter. Here is Romer on Wikipedia. Here is Paul’s blog. He is now at NYU, but spent much of his career at Stanford. Previous MR coverage of Romer is quite extensive. Here is the Prize Committee citation, excellent as always. Here are his three podcasts with Russ Roberts. Here is Joshua Gans on Paul. Here is a Sebastian Mallaby profile of Romer.
In usual fashion, Cowen is exhaustive in the information he provides, and he also has some great links to much of Romer’s most interesting work:
Romer also has a well-known survey piece on the importance of human capital for economic growth; human capital of course is where new ideas come from.
Here is a short Romer piece from 2016, suggesting his own work on growth implies “conditional optimism” on climate change, but not “complacent optimism.” This ties together his work with that of Nordhaus.
Here is Romer on Jupyter vs. Mathematica. Here is Romer on corruption in Greece, he has very broad interests. Here is Romer on TARP and banking reform. Here is Romer’s recent critique of macroeconomics.
For Nordhaus, Cowen again has some fascinating background information:
Nordhaus was briefly Provost at Yale. He also ended up being co-author on Paul Samuelson’s famous textbook in economics.
He co-authored a recent paper arguing we are not near the economic singularity; in this area his work intersects with Romer’s quite closely.
Nuno Palma has an interesting post on Romer from the perspective of economic history. It is absolutely worth reading!
Amol Agrawal also has a good piece. He contextualizes some of their lessons to India, concluding that:
On the knowledge front, our firms are seen as laggards in R&D investments. This is due to both lack of well-designed regulations and unwillingness of the firms to think long-term. Most Indian firms are engaged in basic trading and commerce, similar to the colonial past. Even the torchbearers of technology in Indian industry, the information technology firms, do not have a single Google or HP among them. We have also not given much thought to simple market-driven innovations in our development policies.
On the climate change front, the outlook is more positive as the government has taken some measures to curb carbon emissions contributing to the global cause of sustainable growth.