As I mentioned on Twitter, I have often thought that if instead of going to graduate school in economics from 1983-1987, I had gone to graduate school just a few years later, I would have been a growth theorist, like my only slightly younger fellow Mankiw research assistant and coauthor David Weil, who was a graduate student in economics 1985-1990. The key event that made growth theory big in Economics were a few key papers (building on earlier work by Ken Arrow) by Robert Lucas and his brilliant student Paul Romer.
- Lucas, Robert (1988). “On the Mechanics of Economic Development”. Journal of Monetary Economics22 (1): 3–42. DOI:10.1016/0304-3932(88)90168-7.
- Lucas, Robert (1990). “Why Doesn’t Capital Flow from Rich to Poor Countries”. American Economic Review80: 92–96. JSTOR2006549.
- “Endogenous Technological Change” (Journal of Political Economy, October 1990). Jstor link
- “Increasing Returns and Long Run Growth” (Journal of Political Economy, October 1986). Jstor link
- “Cake Eating, Chattering and Jumps: Existence Results for Variational Problems” (Econometrica 54, July 1986, pp. 897–908). Jstor link
So the timing of these breakthroughs was too late in my graduate school career for me to work on the new growth theory for my dissertation, but the new growth theory was the hot area by the time David Weil was choosing his dissertation topic.
Robert Lucas won the Nobel prize in Economics in 1995
which would be enough accomplishment for any one career, so his work on growth theory is enough to make Robert Lucas a Saint of Economics with supererogatory merit that could be tapped into, if only there were a Pope for Economics.
But Paul Romer is well on his way to earning an even higher order of merit by effective thinking and advocacy, showing the way to go in practice toward a brighter future in which more countries are “Leveling Up, Making the Transition from Poor Country to Rich Country” (the title of my earlier post on economic growth). If you click the link under the picture at the top, you can see Paul Romer’s TED (Technology Entertainment Design) talk on Charter Cities.Please do. You will enjoy watching it as well as be enlightened. This is a great idea that can change the world. I guarantee that I will put this post on my next list of best “save-the world” posts, which will have a category for the best save-the-world ideas of other people that I have written a post about, as well as a lesser category for my own ideas.