Paul Romer, former UR professor, wins Nobel Prize in economics
A former University of Rochester professor was named as a recipient of the 2018 Nobel Prize in Economic Sciences.
Paul Romer was an assistant professor of economics at UR from 1982 to 1986. He will share the prize with William Nordhaus, a professor of economics at Yale University.
In announcing the prize Monday morning, the Nobel committee cited Romer's work to demonstrate how knowledge can function as a driver of long-term economic growth.
"Previous macroeconomic research had emphasized technological innovation as the primary driver of economic growth, but had not modeled how economic decisions and market conditions determine the creation of new technologies," the committee said. "Paul Romer solved this problem by demonstrating how economic forces govern the willingness of firms to produce new ideas and innovations. Romer’s solution, which was published in 1990, laid the foundation of what is now called endogenous growth theory."
After leaving Rochester, Romer went on to appointments at the University of Chicago, the University of California at Berkeley, and Stanford University before his current appointment at NYU’s Stern School of Business. He earned his doctorate from the University of Chicago in 1983.
George Alessandria, chair of Rochester’s department of economics, says the members of the department are thrilled that Romer is being recognized with the Nobel Prize.
“Paul’s first job was at Rochester, where he did pathbreaking work to figure out how firms’ decisions to invest in research and development lead to economic growth.”
That work identified a key failure of private markets that leads to too little investment and growth, Alessandria says.
“His work suggests a key role for the government in protecting the property rights of innovators and subsidizing research. This was a big advance that remains central to our study of growth and policy today.”
Romer is the 12th person with a connection to UR to win a Nobel Prize, and the third to receive the prize for economics. Last year’s prize went to alumnus Richard Thaler, who earned his doctorate from the University of Rochester in 1974 and later served as a faculty member at what is now Rochester’s Simon Business School.
Robert Fogel, a former faculty member who pioneered quantitative analyses of social history, was recognized in 1993.
The formal title of the prize is The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2018.