What should I ask Paul Romer?

Soon I will be doing a Conversation with recent Nobel Laureate Paul Romer, no associated public event.  What should I ask him?

I thank you all in advance for your wise counsel.

Comments

Considering that the there is now a different president, would he consider to get involved again with the charter cities project in Honduras?

Ask him if he is interested in capital theory (a la Lachmann and Hayek).

What, no company was willing to pay for a Conversation With Tyler?

How depressing. Or possibly, Paul Romer has a different ethical framework.

...have you no sense of decency, sir?

What's his take on parking? Is it feasible?

Paul Romer being able to suggest that Nobel Prize winners should be ejected from academic discussion because of their intellectual bad faith, is a very important man to have these days when, what he calls “Mathiness in the Theory of Economic Growth”, helps to obscure so much.
https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.p20151066
If you could forewarn him of something, please ask him to read the Basel Committee’s “An Explanatory Note on the Basel II IRB Risk Weight Functions” of July 2005.
http://www.bis.org/bcbs/irbriskweight.pdf
And then ask him how that paper, for the purposes of the risk weighted capital requirements for banks could come up with a model that assigns a risk weight of 150% to what by being rated below BB- has been made so innocous to bank systems, and only 20% to what is so dangerous because it is rated super safe AAA to AA.

Without referencing the paper, it seems you have a problem with math, and that you don't understand the 'tranche' system of credit. Under the tranche system, a bunch of below BB rated paper can be rated AAA if you agree that the top say 1% of the below BB paper will be last to default, by law, in the event this BB paper defaults, so the holders of this top 1% of the BB paper will be shielded from legal liability in the event of default (until nearly all such BB paper defaults, which is very improbable). You claim to be in the finance business and should know this. You should also know that despite the media hype around 2009--which you seem to be stuck in--the system has worked well since then. In fact, the market for houses and so on has recovered nearly world wide (Japan might be an exception, still below the highs of 1989). I'm not making fun of you (yes I am) but I'm in the science side, economics is just a trolling hobby for me, and I know this. Do you?

(1) Why do so few economists use open source programming languages like Python and R as compared to epidemiology, astrology and applied stats?

(2) You have the chance to repeal one law, which do you choose?

(3) Is there anything that the government or philanthropists can do to undermine large academic publishers, such as RELX?

(4) Which career path would he choose if we had the same skills, and was just graduating high-school?

(1) Is not true. Lots of young people use Python and R. The older ones are just used to Fortram.

Stata dominates for reduced-form micro, and Matlab, Eviews, Mathematica and Fortran are still very for structural micro and macro. Agree that Python and R are growing...

One reason Stata is so popular is because it can do a bunch of stuff with extreme ease. One example: want to use robust standard errors in R? Either you have to calculate them manually, or download a package that stores the results in a completely different way. In Stata you just shove vce(robust) at the end and it takes care of everything.

Romer says he was inspired to study economics after seeing Britan's growth graph from 1750 when he was a student in the 1970s. An extrapolation of that graph shows higher and higher per capita growth to 2050 and 2100 but Thomas Piketty and Robert Gordon have said that instead growth in the U.S. will slow to where it is zero in the late 21st century while you have said there will be a stagnation until the 2040s.

You could ask if he disagrees with you three and why.

Actually Tyler's stagnation hypothesis is perfectly consistent with Romer's model. Cap GDP has slowed down since the mid to late 20th century as the population of the "developed world" has stagnated (growing at around 0.5% a year) hence the population of people who can contribute new ideas has not increased at fast enough rates to maintain the previous growth trajetory. With the future development of massively populous countries like China, India, Indonesia, Philippines, Brazil, etc, the global population that can contribute novel ideas is set to exponentially increase until around 2050-2060. So I expect an acceleration of grow rates from present rates over the next decades.

Where in the world do you get that the developed world has slowed since mid 20th century or that it has slowed to 0.5% a year?

Tyler's "Great Stagnation" doesn't coincide with US and EU GDP per capita growth at 1.5% for the past 5 years and growth has been strong this year as well. That is not stagnation, but down from decades of closer to 2.2% growth, at least for the US.

I think there is a mismeasurement of GDP, which gives the impression of a stagnation. Quickly: due to energy constraints, energy per capita cannot rise (it must stop, not just stagnate) due to not just finite fossil fuels but literally the earth cannot radiate away the energy spent at present and past rates (not 'global warming' but literally the earth would burn up, since energy in the form of IR cannot leave the earth quick enough, like that puzzle with the grains of rice and the chessboard). Hence, we are 'mismeasuring' GDP, basing it on energy. That's as quick and dirty as I can make it, for this limited space.

Bonus trivia: the USA in 1900, per capita, in real dollars, had about the same GDP as in the Philippines today. Which country would you rather live it at $4.5k USD/yr-person? Clearly the Philippines (they have TV, sexy girls in shorts, antibiotics, etc). That goes to the 'mismeasurement' problem I discuss above. Danm I'm good.

The Philippines GDP per capita is $8,000 - you need to use PPP for a proper comparison. (The U.S. was at this level in 1900, and you are right about all of the tech benefits poorer countries get relative to the U.S. 120 years ago.) Bonus: Japan was at $8,000 in 1960 just before the Tokyo Olympics.

1) How have your ideas on charter cities changed since your TED talk?
2) What margins of improvement are there in the development literature?
3) Are big ideas making a comeback in economics?

here's the key question, at least for paul romer qua academic economist, which you can try to phrase more diplomatically if you want.

in his 1994 JEP, 'the origins of endogenous growth,' he concludes his celebration of the rise of endogenous growth theory with the words:

"But if we make use of all of the available evidence, economists can move beyond these models and begin once again to make progress toward a complete understanding of the determinants of long-run economic success. Ultimately, this will put us in position to offer policy-makers something more insightful than the standard neoclassical prescription—more saving and more schooling."

in 2018, romer is awarded the nobel prize. the day he wins, NYU throws a press conference, and a japanese journalist asks him: what should Japan do to return to strong economic growth?

https://www.youtube.com/watch?v=uoZ8NjBLjrg
(starting around 33:10)

After filibustering for a little on the difference between frontier growth and catch-up growth, Romer concludes by telling the Japanese journalist that Japan should consider...investing in more schooling.

It feels an awful lot like by the standards he set out in the conclusion of the 1994 JEP, he - and endogenous growth theory - ultimately failed to give us a deeper understanding of how to advance economic growth, and a new distinct policy agenda. (Paul Krugman has a similar NYT column called "New Growth Fizzle").

You should ask Romer what he thinks of this assessment in general, and what he thinks of the answer he gave to the Japanese journalist, especially in light of this 1994 JEP conclusion.

aCkwArd. TC's CWT has a reputation to preserve as an 'interviewee friendly' forum. This question comes across as a "gotcha" for various reasons. First and foremost, what you tell a journalist at the spur of the moment to an impromptu question may be intended to be a TV 'soundbite' rather than an academic dissertation. Second, people's views change with time. I myself used to be a gold bug and monetarist, believing money is non-neutral, but now, with more wisdom and evidence, I see that, aside from during hyperinflation, money is neutral and paper money or even e-money will work as good as gold.

"When events change, I change my mind. What do you do, (Sir)?" - Paul Samuelson, echoing Keynes.

With the benefit of what is now almost a decade of hindsight and experience, does he feel that Mencius Moldbug's vulgar criticism (which got Moldbug banned from Patri Friedman's Seasteading conference) is any more accurate? From https://www.unqualified-reservations.org/2009/08/from-cromer-to-romer-and-back-again/

"What a faggot! What Professor Romer is proposing is exactly colonialism. What’s worse—he says that like it’s a bad thing. In one breath, he steals the idea and slanders its real authors. Unbelievable."

"Colonialism cannot be restored by any mere subterfuge of rebranding. Its death was part of the slow decline of Western government, in which all institutions become larger and weaker. The postcolonial Third World state is a colony - in the sense of its political, military and/or economic dependency. It is just a very bad colony. It is bound no less closely to the West. All that has changed is that it is run as inefficiently as possible, which may cause some heartburn for its burgeoning army of Western managers - but certainly does not produce any hardship for them. The worse the business, the more managers it needs."

MR, it's like the New Yorker gossip column, but instead of boring old celebs it's about anti-state cruise ship fans and neo-Nazis.

Just try to tell me that weirdos on a boat aren't more interesting than whatever the eff the New Yorker is passing off these days...

How should national governments promote R&D and innovation in a world of strategic (international) competition? Think US and China.

Who are today's best writers in economics?

So here's a really simple question. What is he doing these days? The NYU page says he is on leave. His blog has like one or two posts a month.

In the years following Romer's 2015 "Mathiness" paper, have any of the individuals whose work was criticized in it ever provided any form of substantive response or rebuttal?

To the best of my knowledge, only Thomas Sargent ever provided any comment upon it, and that was lacking in any genuine substance. I'm curious if there has ever been any engagement, whether public or private, on their part or by others advancing their viewpoints to follow up the critique and if so, how did they address it?

If not, what's the right approach to dealing with their apparent refusal to engage in good faith?

Interesting article, but Black’s tub thumping for the substitution of behavioral economics for rational expectations is weak. There is a basic problem in trying to use models in understanding complex systems like economies, the planetary climate system and the interaction of diet and drugs with the human body.l

Btw, thank you very much for your excellent website, Political Calculations.

Charter schools have a "lite" version: sometimes called "pilot schools" (Boston), "in-district" charters, Obama's "turnaround schools," etc.

What's the "lite" version of charter cities? Is that worth doing?

The "lite" version of charter cities is known as a mobile home, and being a tax scofflaw. You don't need a PhD to tell you how to do that.

"a japanese journalist asks him: what should Japan do to return to strong economic growth?... ...Romer concludes by telling the Japanese journalist that Japan should consider...investing in more schooling."

Once again, Japan's GDP per capita has been growing as fast as the US and EU for the past 15 years. 2011$, OECD data:

Japan 2002 $33,200; 2017 $38,200.... 0.9% average
U.S. 2002 $45,000; 2017 $53,200....1.1% average
EU-19 2002 $31,000; 2017 $36,200...1.0% average
U.K. 2002 $34,200; 2017 $39,300... 0.9% average

https://stats.oecd.org/index.aspx?DataSetCode=PDB_LV

Thing about Japan is that it's productivity level has not converged fully to Western standards: GDP per hour worked in Japan is growing at about 1% a year like in the US but it's level of productivity per hour worked is only about 70% of the US's, in most other developed countries that are growing at 1% like US (trivially), Netherlands, Switzerland, Austria, Germany, Belgium and France is around 100%, other developed countries like UK, Canada, Australia it's at 80-85%.

The OECD has as a percentage of U.S. productivity:

Japan 67%
U.K. 77%
Canada 78%
Australia 82%
Austria 84%
France 94%
Germany 95%

The French got it right: work Mon-Wed, party Thu-Sat and rest on Sun.

The French unemployment rate is 9.7% - easy to have high productivity if a big chunk of your low potential workers sitting at home.

Another factor that needs to be taken into account when measuring productivity is quality - Japanese services are provided to an extraordinary high quality vs say UK or US levels. This is very hard to take into account when you measure productivity.

@ChrisA - maybe the unemployed Frenchmen are ZMPs? Zero Marginal Productivity people? Like TC has said, they are good for nothings. Just give them a crust of bread and leave them alone.

This may be a touch off point, but any thoughts abut the federal debt would be of interest.

Yaasss! Yaasss!

The only difference in the way that I'd frame it would be talk about the "pensions crisis" and approach it from the perspective of a problem (crushing future liabilities) afflicting the governments of advanced economies around the world.

What's the best reason for not building charter cities?

What government policies might be most effective in improving the growth of labor productivity?
Should the federal government provide explicit incentives to study STEM fields or should that be left solely to private foundations and/or state/local governments?

Ask him about the recent results of the Millennium Villages Project that you (or Alex T.) recently posted on Marginal Revolution.

Given those results, how does he feel about his appearances on EconTalk, where Russ Roberts criticized him harshly, and he responded rather self-righteously before the experimental results were in?

Would be interesting to hear his thoughts on the World Bank and international development institutions, whether and where they are effective/ineffective.

What metric should we try and focus public discourse around to drive better overall outcomes? Assuming gdp is a “bad” metric for politicians etc to use and the defecto metric today

Why do taxpayers vote for democrats? Why do we have Federal poverty programs when they produce poor, ignorant and violent people?

As the world bank is trying to end poverty, which countries and specific areas have been hardest to help and why?

Does he think there will be a bona fide charter city in his lifetime? In his children's lifetime? Where does he think the first one will be located?

Ask about his work on Aplia. He took a time off a tenure position for this. I use it, with success, in class

Shouldn't there be at least one page in econ 101 textbooks regarding Takahashi Korekiyo's success during the Great Depression?

What is the most important problem facing the world today? Is it Global Warming, re-ignition of the Cold War, or AI safety or something else? What does he think should be done about it? How can people better coordinate to deal with these threats?

Romer researched meta-ideas, which are "ideas about how to support the production and transmission of other ideas."

Prior meta-ideas include patents (to protect invention), and land-grant universities (US).

Questions:

1. What does Romer consider to be the 21st century meta-idea(s)?

2. How will he identify the 21st century's meta-idea(s). especially when trying to identify the signal from the noise? For example, will he consider blockchain to be a meta-idea?

3. How will he support these meta-idea(s)?

Ask him about the bruhaha at the world bank and Chile, and what he thinks of the internal investigation of the matter.

Please ask him about how he was run out of the world bank.

Of the theories articulated in the 20th century which have been proven completely wrong. Of the remaining do any look like they are heading the same direction. How much are these results driven by an incomplete understanding of actual underlying economic processes and how much by fundamental changes in those processes.

The US will not get rid of the Fed nor go back to a gold standard. Is there a third way?

In light of the assumptions that drive Romer-style AK models, what does Romer make of the Bloom and Van Reenen body of work on variation in management practices?

To elaborate briefly, Romer (1996) concludes a summary of new growth theory by stating: “Nonrival ideas can be used to rearrange things, for example, when one follows a recipe and transforms noxious olives into tasty and healthful olive oil. Economic growth arises from the discovery of new recipes and the transformation of things from low to high value configurations.”

Clearly the idea for ramen soup is different from the sequence of operations (recipe) executed to produce any single bowl of ramen actually sold and consumed. Actual economic activity is driven by the evolution of actual recipes, not by ideas for recipes.

Therefore: Are recipes (and other management practices) themselves non-rival and non-excludable? If so, what should we make of the Bloom and Van Reenen body of work on variation in management practices? Or, more broadly, the prevalence of quasi-rents (ref. the existence of entrepreneurship)? If not, what is the (actual) relative importance of non-rival and non-excludable ideas as compared with firm-specific knowledge in the process of economic growth?

If so, what are the implications for policy?

Additional thoughts here
https://www.kauffman.org/-/media/kauffman_org/research-reports-and-covers/2015/10/enabling_entrepreneurial_ecosystems.pdf
and here
http://auerswald.org/2010/08/07/new-growth-theory-not-new-and-not-useful/

As much as possible about Charter Cities - why they haven't worked yet, and what it would take to make them work.

And: what was the hardest-to-replicate factor that made Hong Kong work so well as a (sort of) Charter City? Why did so few other small colonies work out so well, even when small and similarly well-placed (Zanzibar, Djibouti, etc.)?

If a billionaire wanted to make a charter city happen in a way that is likely to work, how much money would it take? Or is money not the constraint that binds? Could any of the Scandinavian Heads of State do it? Or is it basically just up to the country ceding territory?

And: what other rules he considered for controlling language a the World Bank beyond the quota on people writing 'and', and why did he settled on that rule as best?

So all he did was prove that patents are good?

Why we shouldn't build charter cities.

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