EconTalk Paul Romer on Growth, Cities, and the State of Economics
Apr 22, 2019
Paul Romer, a Nobel Laureate and influential economist from New York University, shares his insights on economic growth and the significance of cities. He emphasizes the power of collaboration and diverse communities in fostering innovation. Romer advocates for charter cities as a means to enhance trust and social norms, while critiquing traditional macroeconomic theories for their disconnect from real-world data. Reflecting on his World Bank experience, he raises concerns about transparency and the institution's global impact, particularly in developing nations.
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Economics of Objects vs. Ideas
- The economics of objects is a zero-sum game, where more people mean fewer resources for everyone.
- The economics of ideas allows for non-zero-sum outcomes, where more people can lead to more discoveries and benefits for all.
The Value of People and Ideas
- Differences in ideas, not just resources, drive gains.
- Valuing people for their potential contributions shifts perspectives from rivalry to collaboration.
The Missing Social Element in Economics
- Traditional economics overlooks crucial aspects of human well-being, like social interaction.
- This omission limits our understanding of welfare and policy impacts.