CHAPTER FIFTEEN “That’s Stupid!”

CHAPTER FIFTEEN “That’s Stupid!”
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ELSEWHERE THAT SUMMER of 1980 a young student named Paul Romer prepared to return to graduate school.
Note:TESI SULLA CRESCITA

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his model would treat technological change as internal to its system instead of exogenous.
Note:LA CONOSCENZA AL CENTRO

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growth was actually speeding up, instead of slowing down.
Note:VELOCITÀ

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He would be taking what he had learned in Cambridge to the department that was its fiercest rival on the planet. There is nothing like putting yourself on both sides of a civil war to acquaint yourself with the inner workings of a controversy.
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he was the second of seven children. His father was for many years a farmer, John Deere equipment dealer, aviation academy proprietor, home builder, ski area developer, and, eventually, a politician.
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For most of his undergraduate career, Romer planned to become a cosmologist.
Note:LA PRIMA IDEA

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Then, for a time, he thought of becoming a corporate lawyer.
Note:SECONDA IDEA

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He had learned a fair amount of economics over beer from his undergraduate roommate at Chicago, David Gordon (who is today a professor of economics at Clemson University),
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“Anyone working inside economic theory these days knows in his or her bones that growth theory is not a promising pond for an enterprising theorist to fish in…. I think growth theory is at least temporarily played out.”
Note:AL MIT DELL EPOCA...X QUESTO SCELSE CGICAGO

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One day Davidson was presenting the Von Neumann model of growth to his class. This was the classic 1937 paper in which, among other things, Von Neumann employed topology to prove for the first time the existence of equilibrium
Note:IL PRIMO MODELLO INCNTRATO DA ROMER

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all inputs and outputs grow at a constant rate: a fixed set of goods “breeds” an ever larger collection of such goods, as if by magic. Steel produces more steel, corn produces more corn. Nothing changes; the economy just grows. At one point in the exposition, Romer blurted out, “But that’s stupid!”
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In the older model, technology was assumed to be unchanging for simplicity’s sake—growth was the product of capital multiplied by a technological constant
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The Solow model was far more appealing than that. The rate of technical change was set exogenously, but at least technological knowledge was assumed to grow,
Note:SOLOW

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“In place of a discussion of new products, new processes, universities, private research labs, patent law, scientific inquiry—all the things that seemed to me then and still seem to me now to be at the heart of economic growth—the model blithely offers up an attractive mathematical assumption that cannot be given any meaningful interpretation.”

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IL PUNTO DEBOLE DI NEWMAN E SOLOW

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It would be better than Von Neumann’s, in that it would include knowledge. It would be better than Solow’s, too, in that the new knowledge would arise from purposeful decisions within the system.
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No one ever invested in R&D for private gain in the Solow model; everyone simply benefited from spillovers from government research.
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there were the Club of Rome Report, the Population Bomb, the End of Capitalism, and other gloomy scenarios. Pessimism extended deep into the economics profession itself.
Note:L ATTIVITÀ SFERA

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the economist Julian Simon and the supply-side journalist George Gilder,
Note:VOCI CONTROCORRENTE

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Romer took the other side of the argument. Human living conditions had been improving dramatically for at least a couple of centuries, he reasoned. Why not expect that the trend would continue? In his model, growth would continue indefinitely,
Note:UN MDELLO OTTIMISTA

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“I wasn’t thinking about picking a fight with the doomsters or about what government should do,” Romer said much later, when the work was done. “I just wanted to understand.
VOGLIA DI CAPIRE