I’m a
senior fellow in the Stanford Institute for Economic Policy Research
(SIEPR). Until recently, I taught at Stanford’s Graduate School of
Business, which led to a teaching award and an entrepreneurial
detour into
educational software. Before moving to Stanford, I taught at the
University of California at Berkeley, the University of Chicago, and
the University of Rochester. I am a fellow of the American Academy of
Arts and Sciences and received the Recktenwald Prize in Economics. I
have two children and one grandchild. I am related to Roy Romer but not
to Christina Romer.
I grew up in a political family. In college, I tried to strike out in a
new direction by studying mathematical physics and cosmology. Graduate
work in economics (first at MIT, then Queens University, and the
University of Chicago) was a compromise that brought me back toward my
policy roots but still left room to explore big ideas.
The contrast between the economics of objects and the economics of
ideas is the thread that runs through my work. In graduate school, I
wondered why growth rates had been increasing over time. Fresh from
cosmology, I was not motivated by policy concerns. It just seemed like
an important puzzle. Existing theory suggested that scarcity combined
with population growth should be making things worse, but they kept
getting better at ever faster rates. New ideas, in the form of new
technologies, had to be the answer. Everyone “knew” that. But why do
new technologies keep arriving at faster rates? One key insight is that
because ideas are nonrival or sharable, interacting with more people
turns out to make us all better off. In this sense, ideas are the exact
opposite of scare objects. (See my recent paper
with Chad Jones for
more.)
Over time, it became clear to me that we will not understand the deep
dynamics of technological ideas until we understood the dynamics of
another type of idea, the rules that people follow. The patent system
is a set of rules that encourages the discovery of new technologies. So
is our system of open science. Rules that limit direct foreign
investment can keep ideas from spreading to poor countries. So can
rules (and systems of enforcement) that allow high levels of crime. As
we interact with more people, the rules become more important and more
complicated.
In my current work on rules, I have come full circle. I’m starting with
a pressing policy concern: How can people living in places like Haiti,
the Democratic Republic of the Congo, or Cuba get access to rules that
protect them and let them engage in mutually beneficial exchange with
others from all over the world? As Avner Grief and Douglass North have
already shown, rules raise deeper theoretical issues than technologies.
I’m convinced that practical progress and theoretical insight are more
likely if we take the practical concerns seriously, as I've done with
the suggestion that countries build charter cities.