For a nation the choices that determine whether income doubles with every generation, or instead with every other generation, dwarf all other policy concerns. — Paul M. Romer
Stanford economist Paul Romer is one of the very best modern-day researchers on the fundamentals of long term economic growth. I highly recommend the Econtalk podcast interview with Paul Romer titled “Romer on Growth“. There is a complete transcript of the Econtalk interview on Econlib.
See also Paul Romer’s short chapter Economic Growth in The Concise Encyclopedia of Economics.
The Reason Magazine interview Post-Scarcity Prophet offers some perspective why the New Growth Theory is so important:
“One of the 25 most influential Americans,” pronounced Time. “His ideas may just revolutionize the study of economics.” Newsweek included him in its roster of “The Century Club,” a “list of 100 people for the New Century.” He is a perennial short-lister for the Nobel Memorial Prize in Economics. His work has been lauded by business guru Peter Drucker and Nobel-winning economist Robert Solow. He is the STANCO 25 Professor of Economics at Stanford University’s Graduate School of Business and a senior fellow of the Hoover Institution. He was recently elected a fellow of the American Academy of Arts and Sciences.
As one of the chief architects of “New Growth Theory,” Paul Romer has had a massive and profound impact on modern economic thinking and policymaking. New Growth Theory shows that economic growth doesn’t arise just from adding more labor to more capital, but from new and better ideas expressed as technological progress. Along the way, it transforms economics from a “dismal science” that describes a world of scarcity and diminishing returns into a discipline that reveals a path toward constant improvement and unlimited potential. Ideas, in Romer’s formulation, really do have consequences. Big ones.
One problem that Americans have is that their government has been taken over by the old-ideas people, in particular, the anti-growth redistributionists. John Mauldin recently published one of Woody Brock’s essays on the Obama policies and the grim outlook for the debt/GDP ratio. Dear reader — please let me know if you come across any Obama policy that is seriously pro-growth.