9 ms·

Why Paul Romer Won the Nobel Prize in Economics

117 points by jeffreyrogers 8y ago

savanaly 8y ago
Have seen very little discussion or interest in this year's economics prize compared to previous years'. Wonder why that is.
- thanatropism 8y ago
  HN's ideal economist is Piketty: politically contentious and somewhat against the grain -- because, of course, software developers are good at everything, and non-economists chiding the economists must be right. (I'm surprised HN doesn't feature Steve Keen constantly) Romer's work could be politically contentious if it wasn't so abstract and embedded in a history of technical economic ideas about development that way back when (in the Solow era) echoed the basic insights and biases of micro 101. Of course, HN (and everyone else) wants to have its own ideas about development and hamper on how "unrealistic" micro 101 is -- so development theory is never discussed. Then there's charter cities, which is like Urbit for non-nerds.
  - crdoconnor 8y ago
    >non-economists chiding the economists must be right. Well, there's this guy called Paul Romer who thinks that too: "Paul Romer says he really hadn’t planned to trash macroeconomics as a math-obsessed pseudoscience. Or infuriate countless colleagues. It just sort of happened." https://www.bloomberg.com/news/articles/2016-11-18/blah-blah-blah-a-renowned-economist-sums-up-the-state-of-macro https://www.bloomberg.com/news/articles/2016-11-18/blah-blah... >Romer's work could be politically contentious It is politically contentious. He wrote a paper on bankruptcy for profit, ffs. The Steve Keen loathing neoliberals on HN reading that sentence probably can't even conceive of such a thing being possible. http://pages.stern.nyu.edu/~promer/Looting.pdf http://pages.stern.nyu.edu/~promer/Looting.pdf Alan Greenspan famously, when challenged, also couldn't wrap his head around Akerlof and Romer's paper, but he's a high profile economist so naturally as a lowly programmer and "Steve Keen fan" I'm not allowed to call him out on it ;-) It was written in 1994, but sums up the financial crisis pretty well.
    - vec 8y ago
      > "Paul Romer says he really hadn’t planned to trash macroeconomics as a math-obsessed pseudoscience." If I understand his critique correctly, it's that macroeconomics has used mathematical rigor and internal consistency to mask the common-sense observation that the models' actual connections to the real world phenomena they seek to simulate have almost completely eroded away. I, for one, can think of a couple of reasons that vein of criticism might not be the sort of argument HN is primed to embrace.
    - neffy 8y ago
      Not sure why you're getting down voted, deliberately exploiting corporate status by defaulting on loans in various contexts is or certainly should be, a well known exploit of the financial system. There´s several papers written in the 90´s and early 00´s that are quite depressing in terms of how they nail failures in both economic understanding and regulation, that will be major contributors to the subsequent crashes.
  - sien 8y ago
    Hacker News search - Piketty - 163 results Krugman - 426 results Milton Friedman - 69 results Econtalk - 24 results Tyler Cowen - 88 results
    - nabla9 8y ago
      Richard Thaler - 21 results. Bengt Holmström - 8 results
      - rajacombinator 8y ago
        Von Mises - 1 result (2, but one is a self proclaimed hit piece. Both have no comments. As expected.)
        sien 8y ago
        Hayek : 294 Keynes : 86 Adam Smith : 106
- nonbel 8y ago
  >"Most importantly, Romer won the Prize for seeing how the non-rival nature of ideas can boost ongoing and indeed “endogenous” economic growth. Romer also showed mathematically that this process of growth is bounded, namely that it does not explode without limit" Is it common to assume economic growth can proceed at an infinite rate?
  - agumonkey 8y ago
    ignore more than assume
    - nonbel 8y ago
      Are you saying economic growth can proceed at an infinite rate?
      - agumonkey 8y ago
        I meant that trendy economic theories spread thanks to ignorance about reality, there's no deep thinking when they become the norm.
  - e12e 8y ago
    Not certain how common it is these days, but it was supposedly commented on by Kenneth Boulding: "Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist."
    - gowld 8y ago
      No one cares about "forever". In the long run, we're all dead, and there's no theoretical limit to exponential growth until we're all dead.
      - btrask 8y ago
        Especially if we ensure that the end of exponential growth will kill us.
- simplegeek 8y ago
  He was a strong contender last year as well. BTW, Paul Romer is also an entrepreneur: https://paulromer.net/about-paul-romer/ https://paulromer.net/about-paul-romer/ (relevant to this crowd :)).
oldgradstudent 8y ago
He did not win the Nobel Prize in Economics because there is no such prize. It's The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. http://exiledonline.com/the-nobel-prize-in-economics-there-is-no-nobel-prize-in-economics/ http://exiledonline.com/the-nobel-prize-in-economics-there-i... Just imagine the ridicule if instead of the Turing or Shannon awards we'd have the ACM Prize in Computer Science in Memory of Alfred Nobel, or the IEEE Prize in Electrical Engineering in Memory of Alfred Nobel. BTW, here's a great paper by George Akerlof and Paul Romer who both won the prize: http://pages.stern.nyu.edu/~promer/Looting.pdf http://pages.stern.nyu.edu/~promer/Looting.pdf
- antidesitter 8y ago
  Is that a picture of Nobel laureate Friedrich Hayek with the word "fraud" plastered over it? And what is the word "libertards" in the headline supposed to mean? > It's The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Also known as the Nobel Prize in Economics, selected by the same institution as the other prizes (the Royal Swedish Academy of Sciences), announced at the same time as the other prizes, awarded at the same ceremony as the other prizes, and selected "in accordance with the rules governing the award of the Nobel Prizes instituted through [Alfred Nobel's] will." > Just imagine the ridicule if instead of the Turing or Shannon awards we'd have the ACM Prize in Computer Science in Memory of Alfred Nobel, or the IEEE Prize in Electrical Engineering in Memory of Alfred Nobel. Why would that be ridiculous?
  - oldgradstudent 8y ago
    The Exile was always a little bit over the top. Their coverage, though, especially their Russia coverage, was always top notch. I'm pretty sure the history of the prize is accurate. > Why would that be ridiculous? Because that's so blatant in using the reputation of the Nobel Prize to bolster their own questionable discipline.
    - antidesitter 8y ago
      > The Exile was always a little bit over the top. A little? It's obvious they have an ideological axe to grind, even stooping to name-calling. > I'm pretty sure the history of the prize is accurate. What about its history is accurate? > Because that's so blatant in using the reputation of the Nobel Prize The Nobel Prize in Economics has existed since 1968 and, like I said, is awarded by the same institution as the other prizes, in the same ceremony, and in accordance with the same rules governing the awarding of the other prizes. What's dubious about that? > to bolster their own questionable discipline. What discipline is questionable?
vixen99 8y ago
Romer has made some comments about open source with the specific example of Jupyter and Mathematica. " At a time when trust and truth are in retreat, the social dimension is the one that matters. Jupyter rewards transparency; Mathematica rationalizes secrecy. Jupyter encourages individual integrity; Mathematica lets individuals hide behind corporate evasion. Jupyter exemplifies the social systems that emerged from the Scientific Revolution and the Enlightenment, systems that make it possible for people to cooperate by committing to objective truth; Mathematica exemplifies the horde of new Vandals whose pursuit of private gain threatens a far greater pubic loss–the collapse of social systems that took centuries to build."
- senthil_rajasek 8y ago
  An earlier discussion on Jupyter, Mathematica here on HN, https://news.ycombinator.com/item?id=16840692 https://news.ycombinator.com/item?id=16840692
tooltalk 8y ago
And he is a python programmer. Thomas Sargant another Nobel economist at NYU is a rabid Julia fanbou.
deleted 8y ago
[deleted]
throw2016 8y ago
Its surprising to see one of the most prominent critics of modern macroeconomics getting a nobel. [1] Till now egalitarian Sweden has made no secret of their love affair with libertarian economists with 8 winning the prize. [2] One would think the tide is finally turning after the banking crisis with macro economists in deep introspection on dubious models, data and narratives but just last week they were out in force demonizing Bernie Sanders amazon bill. 1. https://ccl.yale.edu/sites/default/files/files/The%20Trouble%20with%20Macroeconomics.pdf https://ccl.yale.edu/sites/default/files/files/The%20Trouble... 2. https://www.theatlantic.com/business/archive/2016/10/nobel-factor-offer-soderberg/503186/ https://www.theatlantic.com/business/archive/2016/10/nobel-f...
- saosebastiao 8y ago
  The funny thing about macroeconomics is that everybody is a critic of it for different reasons. Non-economists might hate it because it tells them things that they find paradoxical or hard to swallow. Microeconomists might criticize it because it lacks empirical rigor and the economy as a whole is intractably complex to model simplistically. Even macroeconomists criticize it. Why? Because it's a field that is legitimately hard to research and understand due to its complex nature and chaotic feedback loops. It gets manipulated by politicians seeking authority for their half-baked ideas. And people discredit the entire profession because they focus way too much on controversial political hotbuttons like business cycle theory, and subsequently use that criticism as a justification for ignoring research that is sound and has broad consensus even among academics of wildly differing ideologies. Their job sucks, and they know it.
  - Gibbon1 8y ago
    My two points are. 1. A lot of soft hard to quantify schools of thought went totally off the rails after WWII in a head long rush to impose 'scientific rigor' by aping physics. And to curry favor with the suddenly terrifying political theories of the day. 2. Martin Gardner has line that when supporting evidence in a field is weak and opaque theory mimics the cultural biases of the scientists. "evidence in a field is weak and opaque" fits economics perfectly. Put those two together is the conclusion is economics is mostly a huge pile of stinking garbage. At best it's mostly irrelevant.
AtlasBarfed 8y ago
The economics prize in honor of Alfred P. Nobel...

117 points by jeffreyrogers 8y ago

Have seen very little discussion or interest in this year's economics prize compared to previous years'. Wonder why that is.

thanatropism 8y ago
HN's ideal economist is Piketty: politically contentious and somewhat against the grain -- because, of course, software developers are good at everything, and non-economists chiding the economists must be right. (I'm surprised HN doesn't feature Steve Keen constantly) Romer's work could be politically contentious if it wasn't so abstract and embedded in a history of technical economic ideas about development that way back when (in the Solow era) echoed the basic insights and biases of micro 101. Of course, HN (and everyone else) wants to have its own ideas about development and hamper on how "unrealistic" micro 101 is -- so development theory is never discussed. Then there's charter cities, which is like Urbit for non-nerds.
- crdoconnor 8y ago
  >non-economists chiding the economists must be right. Well, there's this guy called Paul Romer who thinks that too: "Paul Romer says he really hadn’t planned to trash macroeconomics as a math-obsessed pseudoscience. Or infuriate countless colleagues. It just sort of happened." https://www.bloomberg.com/news/articles/2016-11-18/blah-blah-blah-a-renowned-economist-sums-up-the-state-of-macro https://www.bloomberg.com/news/articles/2016-11-18/blah-blah... >Romer's work could be politically contentious It is politically contentious. He wrote a paper on bankruptcy for profit, ffs. The Steve Keen loathing neoliberals on HN reading that sentence probably can't even conceive of such a thing being possible. http://pages.stern.nyu.edu/~promer/Looting.pdf http://pages.stern.nyu.edu/~promer/Looting.pdf Alan Greenspan famously, when challenged, also couldn't wrap his head around Akerlof and Romer's paper, but he's a high profile economist so naturally as a lowly programmer and "Steve Keen fan" I'm not allowed to call him out on it ;-) It was written in 1994, but sums up the financial crisis pretty well.
  - vec 8y ago
    > "Paul Romer says he really hadn’t planned to trash macroeconomics as a math-obsessed pseudoscience." If I understand his critique correctly, it's that macroeconomics has used mathematical rigor and internal consistency to mask the common-sense observation that the models' actual connections to the real world phenomena they seek to simulate have almost completely eroded away. I, for one, can think of a couple of reasons that vein of criticism might not be the sort of argument HN is primed to embrace.
  - neffy 8y ago
    Not sure why you're getting down voted, deliberately exploiting corporate status by defaulting on loans in various contexts is or certainly should be, a well known exploit of the financial system. There´s several papers written in the 90´s and early 00´s that are quite depressing in terms of how they nail failures in both economic understanding and regulation, that will be major contributors to the subsequent crashes.
- sien 8y ago
  Hacker News search - Piketty - 163 results Krugman - 426 results Milton Friedman - 69 results Econtalk - 24 results Tyler Cowen - 88 results
  - nabla9 8y ago
    Richard Thaler - 21 results. Bengt Holmström - 8 results
    - rajacombinator 8y ago
      Von Mises - 1 result (2, but one is a self proclaimed hit piece. Both have no comments. As expected.)
      - sien 8y ago
        Hayek : 294 Keynes : 86 Adam Smith : 106
nonbel 8y ago
>"Most importantly, Romer won the Prize for seeing how the non-rival nature of ideas can boost ongoing and indeed “endogenous” economic growth. Romer also showed mathematically that this process of growth is bounded, namely that it does not explode without limit" Is it common to assume economic growth can proceed at an infinite rate?
- agumonkey 8y ago
  ignore more than assume
  - nonbel 8y ago
    Are you saying economic growth can proceed at an infinite rate?
    - agumonkey 8y ago
      I meant that trendy economic theories spread thanks to ignorance about reality, there's no deep thinking when they become the norm.
- e12e 8y ago
  Not certain how common it is these days, but it was supposedly commented on by Kenneth Boulding: "Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist."
  - gowld 8y ago
    No one cares about "forever". In the long run, we're all dead, and there's no theoretical limit to exponential growth until we're all dead.
    - btrask 8y ago
      Especially if we ensure that the end of exponential growth will kill us.
simplegeek 8y ago
He was a strong contender last year as well. BTW, Paul Romer is also an entrepreneur: https://paulromer.net/about-paul-romer/ https://paulromer.net/about-paul-romer/ (relevant to this crowd :)).

oldgradstudent 8y ago

He did not win the Nobel Prize in Economics because there is no such prize. It's The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. http://exiledonline.com/the-nobel-prize-in-economics-there-is-no-nobel-prize-in-economics/ http://exiledonline.com/the-nobel-prize-in-economics-there-i... Just imagine the ridicule if instead of the Turing or Shannon awards we'd have the ACM Prize in Computer Science in Memory of Alfred Nobel, or the IEEE Prize in Electrical Engineering in Memory of Alfred Nobel. BTW, here's a great paper by George Akerlof and Paul Romer who both won the prize: http://pages.stern.nyu.edu/~promer/Looting.pdf http://pages.stern.nyu.edu/~promer/Looting.pdf

antidesitter 8y ago
Is that a picture of Nobel laureate Friedrich Hayek with the word "fraud" plastered over it? And what is the word "libertards" in the headline supposed to mean? > It's The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Also known as the Nobel Prize in Economics, selected by the same institution as the other prizes (the Royal Swedish Academy of Sciences), announced at the same time as the other prizes, awarded at the same ceremony as the other prizes, and selected "in accordance with the rules governing the award of the Nobel Prizes instituted through [Alfred Nobel's] will." > Just imagine the ridicule if instead of the Turing or Shannon awards we'd have the ACM Prize in Computer Science in Memory of Alfred Nobel, or the IEEE Prize in Electrical Engineering in Memory of Alfred Nobel. Why would that be ridiculous?
- oldgradstudent 8y ago
  The Exile was always a little bit over the top. Their coverage, though, especially their Russia coverage, was always top notch. I'm pretty sure the history of the prize is accurate. > Why would that be ridiculous? Because that's so blatant in using the reputation of the Nobel Prize to bolster their own questionable discipline.
  - antidesitter 8y ago
    > The Exile was always a little bit over the top. A little? It's obvious they have an ideological axe to grind, even stooping to name-calling. > I'm pretty sure the history of the prize is accurate. What about its history is accurate? > Because that's so blatant in using the reputation of the Nobel Prize The Nobel Prize in Economics has existed since 1968 and, like I said, is awarded by the same institution as the other prizes, in the same ceremony, and in accordance with the same rules governing the awarding of the other prizes. What's dubious about that? > to bolster their own questionable discipline. What discipline is questionable?

vixen99 8y ago

Romer has made some comments about open source with the specific example of Jupyter and Mathematica. " At a time when trust and truth are in retreat, the social dimension is the one that matters. Jupyter rewards transparency; Mathematica rationalizes secrecy. Jupyter encourages individual integrity; Mathematica lets individuals hide behind corporate evasion. Jupyter exemplifies the social systems that emerged from the Scientific Revolution and the Enlightenment, systems that make it possible for people to cooperate by committing to objective truth; Mathematica exemplifies the horde of new Vandals whose pursuit of private gain threatens a far greater pubic loss–the collapse of social systems that took centuries to build."

senthil_rajasek 8y ago
An earlier discussion on Jupyter, Mathematica here on HN, https://news.ycombinator.com/item?id=16840692 https://news.ycombinator.com/item?id=16840692

tooltalk 8y ago

And he is a python programmer. Thomas Sargant another Nobel economist at NYU is a rabid Julia fanbou.

deleted 8y ago

[deleted]

throw2016 8y ago

Its surprising to see one of the most prominent critics of modern macroeconomics getting a nobel. [1] Till now egalitarian Sweden has made no secret of their love affair with libertarian economists with 8 winning the prize. [2] One would think the tide is finally turning after the banking crisis with macro economists in deep introspection on dubious models, data and narratives but just last week they were out in force demonizing Bernie Sanders amazon bill. 1. https://ccl.yale.edu/sites/default/files/files/The%20Trouble%20with%20Macroeconomics.pdf https://ccl.yale.edu/sites/default/files/files/The%20Trouble... 2. https://www.theatlantic.com/business/archive/2016/10/nobel-factor-offer-soderberg/503186/ https://www.theatlantic.com/business/archive/2016/10/nobel-f...

saosebastiao 8y ago
The funny thing about macroeconomics is that everybody is a critic of it for different reasons. Non-economists might hate it because it tells them things that they find paradoxical or hard to swallow. Microeconomists might criticize it because it lacks empirical rigor and the economy as a whole is intractably complex to model simplistically. Even macroeconomists criticize it. Why? Because it's a field that is legitimately hard to research and understand due to its complex nature and chaotic feedback loops. It gets manipulated by politicians seeking authority for their half-baked ideas. And people discredit the entire profession because they focus way too much on controversial political hotbuttons like business cycle theory, and subsequently use that criticism as a justification for ignoring research that is sound and has broad consensus even among academics of wildly differing ideologies. Their job sucks, and they know it.
- Gibbon1 8y ago
  My two points are. 1. A lot of soft hard to quantify schools of thought went totally off the rails after WWII in a head long rush to impose 'scientific rigor' by aping physics. And to curry favor with the suddenly terrifying political theories of the day. 2. Martin Gardner has line that when supporting evidence in a field is weak and opaque theory mimics the cultural biases of the scientists. "evidence in a field is weak and opaque" fits economics perfectly. Put those two together is the conclusion is economics is mostly a huge pile of stinking garbage. At best it's mostly irrelevant.

AtlasBarfed 8y ago

The economics prize in honor of Alfred P. Nobel...