CHAPTER SIXTEEN In Hyde Park
Note:16@@@@@@@@@@IL MODELLO: LA CONCORRENZA È GARANTITA DALL ESTEENALITÀ DELKA CONOSCENZA. MA QUAL È IL LIVELLO OTTIMO DI ESTERNALITÀ (IL LIVELLO CHE NN SCORAGGIA GLI INVESTIMENTI E VIMPEDISCE IL MONOPOLIO)? QUI LO STATO PUÒ AVERE UN RUOLO.
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Taking ideas seriously, Chicagoans liked to say, was what the university was about.
Note:IL MOTTO DI CHICAGO
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Milton Friedman had enjoyed remarkable success in his battle with Keynes, regularly going over the heads of his fellow economists to appeal directly to the general public.
Note:IN QUEL MOMENTO
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It persuaded countless young persons, including the youthful Romer, that conservative didn’t have to mean dumb.
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Free to Choose, became a best seller.
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George Stigler was still teaching in the business school.
Note:1980
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Meanwhile the mathematical tilt increased. Chicago had hired its first cutting-edge mathematical economist in 1971, a Berkeley Ph.D. named William “Buz” Brock. Brock in turn had scouted out Lucas and, in the same year, José Scheinkman.
Note:LA NUOVA GENERAZIONE
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Arriving later were Thomas Sargent, who today teaches at New York University, and Lars Hansen, still in Chicago.
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these were the New Classicals, great believers in the Invisible Hand, very high-tech, and appealing to the young.
Note:FRESHWATER MACRO
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Almost immediately a new group among the faculty emerged, labor economists, both theorists and econometricians who were more interested in what they could learn about the workings of particular markets than in generalizing about the behavior of the economy as a whole. Led by Gary Becker, Sherwin Rosen, Sam Peltzman, and James Heckman, these were economists operating more nearly in the old Marshallian tradition that Friedman had championed and that (with its Keynesian add-ons) Paul Samuelson had designated neoclassical.
Note:L ALTRA CHICAGO
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they still considered themselves to be applied price theorists—not literary economists by any means, but neither high-tech acolytes of the Modern movement.
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Romer might have said that he planned to characterize knowledge and show how it could accumulate in the same way as any other form of capital.
Note:IL PIANO
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the basic intuition: new products, new processes, entrepreneurs, universities, private research labs, patent law, scientific inquiry
Note:IL CUORE DELLA CRESCITA
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Things that had been pretty hard to sort out became much easier to say in math.”
Note:IL MEZZO DI ESPRESSIONE
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Romer wanted a model in which growth could continue indefinitely.
Note:LA CRESCITA INFINITA
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In the Solow model the economy inevitably reached a kind of adulthood in fifty or a hundred years and stopped growing altogether.
Note:EQUILIBRIO
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the philosophical histories of Polybius, Saint Augustine, Vico, Kant, Condorecet, Hegel, and Teilhard de Chardin.
Note:CLASSICI E PASSIONE X IL CICLO
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Solow model: the assumption that nations soon would converge to a steady state.
Note:EQUILIBRIO DI SOLOW
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internal dynamic of science: the more you learn, the faster you learn new things. If knowledge was the source of increasing returns, then accumulating more of it should mean faster growth
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IL MOTORE ROMERIANO
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But there was no readily available metaphor for the world that he imagined
Note:SCARSITÀ DI METAFORE
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Romer occasionally turned to the view of growth embodied in the popular television series Star Trek, about the distant future, in which nations rose and fell but the species went on innovating and expanding outward, if not forever, at least for a good long time.
Note:STAR TREK
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increasing returns to knowledge versus diminishing returns to land, labor, and capital.
Note:LA DIFFERENZA COL PASSATO
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“I’d been working on a social planner model like Ramsey, where the planner maximizes in the context of increasing returns to knowledge. I could get growth that was speeding up that way, which is what I wanted, but I thought that it couldn’t be decentralized into a competitive equilibrium.
Note:PROBLEMA DI STIGLER O PIN FACTORY
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it didn’t seem consistent with the market.”
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a single firm would take advantage of increasing returns to knowledge to monopolize its markets
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There was no fun in making a model of that, since it clearly was not what happened ordinarily,
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The role of knowledge spillovers in Romer’s first model
Note:IL MECCANISMO CHE IMEDISCE IL MONOPOLIO
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beneficial externalities—would cancel out increasing internal returns.
Note:ECCO LO SPIRAGLIO
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there was the problem of multiple equilibria, meaning that, as always with positive feedback, things could come out in more than just one way. Perturbations might prove irreversible, rather than return to “normal.”
Note:UN PROBLEMA
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The biggest technical issue had to do with demonstrating the stability of the model.
Note:LA VERA SFIDA
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Once he built spillovers into his model, Romer had a world that looked much like Marshall’s system, though he wouldn’t have described it that way at the time. Perfect competition was preserved.
Note:RICORDIAMCI IL COLPO DI GENIO
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Solow had solved the problem by bringing in new knowledge from outside the model, as had Mill. Romer went in the opposite direction, as had Marshall: his accumulating knowledge came from new investments; it was then communicated to all the rest by means of spillovers.
Note:L ESTERNALITÀ GARANTISCE L ENDOGENICITÀ
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these external economies constituted a strong defense, at least intuitively, against the possibility that a single firm would take over the world,
Note:IL GRANDE MONOPOLIO
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read an editorial arguing that the space race had been good for economic growth,
Note:RAPPORTATO AL SENSO COMUNE
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“Dynamic Competitive Equilibria with Externalities, Increasing Returns and Unbounded Growth”
Note:L ARTICOLO
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A table of the best available data (that of Simon Kuznets) showed that since 1841 the rate of growth in the four leading industrial nations had been speeding up, not slowing down.
Note:NELL ARTICOLO ANCHE UN RIFERIMENTO ALLA REALTÀ
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During a climatological warming trend in the Middle Ages, presumably caused by perturbations in the orbit of Earth, he noted that the northern limit of grain cultivation in Europe crept a hundred miles to the north—a fact recognized by contemporaries. Farms were correspondingly more productive as a result. That was exogenous change, he wrote.
Note:SIGNIFICATO DI ESOGENO
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But when yields of domestic wheat rose steadily during those same years while wild grain yields remained the same, the change should be understood as having occurred within the system—that is, endogenously.
Note:SIGNIFICATO DI ENDOGENO
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Romer mapped out and carefully defined certain places where the market failed because inventors had insufficient reason to invest their efforts;
Note:FALLIMENTI DEL MERCATO
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About the policy implications of his model for growth, on the other hand, Romer was reticent—not surprisingly, perhaps, because the implications did not seem very Chicagoan at all. It appeared that government subsidies could sometimes improve economic performance.
POLICY
