Professor of Economics at Stern School of Business.
of growth and innovation.
Named one of America’s 25 most influential people by Time magazine, Paul Romer is the primary developer of New Growth Theory, which provides a fresh foundation for how businesses and governments think about wealth creation. Paul is one of Foreign Policy’s Top 100 Global Thinkers 2012 and 2010.
In research that many believe will lead to a Nobel prize, he addresses one of the oldest questions in economics: What sustains economic growth in a physical world characterized by diminishing returns and scarcity?
The answer: the way societies deal with advances in technology.
Economic growth is driven by new ideas and advances in technology, and governments can increase the rate of growth—in ways that benefit all citizens—by creating appropriate economic incentives.
Dr. Romer’s current research focuses on the concept of charter cities —
"We will not understand the deep dynamics of technological ideas until we understand the dynamics of. . . the rules that people follow. The patent system is a set of rules that encourages the discovery of new technologies. So is our system of open science. Rules that limit direct foreign investment can keep ideas from spreading to poor countries. So can rules (and systems of enforcement) that allow high levels of crime. As we interact with more people, the rules become more important and more complicated.
"In my current work on rules, I’m starting with a pressing policy concern: How can people living in places like Haiti, the Democratic Republic of the Congo, or Cuba get access to rules that protect them and let them engage in mutually beneficial exchange with others from all over the world?"
Paul M. Romer is an entrepreneur who has successfully applied technology to
higher education —
He founded Aplia, Inc. in 2000, which offers a web-based technology for changing the way we teach by requiring from students the effort necessary for them to succeed while raising the productivity of instructors.
He is the author of dozens of articles, including several popular articles describing the role of technology in growth.
On Economic Growth
"Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable. A useful metaphor for production in an economy comes from the kitchen. To create valuable final products, we mix inexpensive ingredients together according to a recipe. The cooking one can do is limited by the supply of ingredients, and most cooking in the economy produces undesirable side effects. If economic growth could be achieved only by doing more and more of the same kind of cooking, we would eventually run out of raw materials and suffer from unacceptable levels of pollution and nuisance. History teaches us, however, that economic growth springs from better recipes, not just from more cooking. New recipes generally produce fewer unpleasant side effects and generate more economic value per unit of raw material.
Every generation has perceived the limits to growth that finite resources and undesirable side effects would pose if no new recipes or ideas were discovered. And every generation has underestimated the potential for finding new recipes and ideas. We consistently fail to grasp how many ideas remain to be discovered. Possibilities do not add up. They multiply."
Credentials & Honors
- Henry Kaufman Visiting Professor, NYU Stern School of Business
- Former Senior Fellow, Institute for Economic Policy Research, Stanford
- Former Senior Fellow, Stanford Center for International Development
- Foreign Policy’s Top 100 Global Thinkers 2012 and 2010
- Former Professor of Economics, Stanford Graduate School of Business
- Former Senior research fellow, Hoover Institution
- Ralph Landau Senior Fellow, Center for Economic Policy Research, Stanford
- Fellow, American Academy of Arts and Sciences, Econometric Society, the Canadian Institute for Advanced Research, and the Center for Advanced Study in the Behavioral Sciences
- Research Associate, National Bureau of Economic Research
- Member, Executive Council of the American Economics Association.
- Member, National Research Council Panel on Criteria for Federal Support of Research and Development
- Co-chair, MacArthur Foundation Research Network on Preferences
- Recipient, Distinguished Teaching Award, Stanford Business School
- Sloan Foundation Fellowship
- Former faculty member, Berkeley, Chicago and Rochester
- B.A. and Ph.D., University of Chicago
- Contributor to numerous scholarly and popular publications, including American Economic Review, European Economic Review, Journal of Political Economy, The Economist, Forbes and The Fortune Encyclopedia of Economics