Romer, the Nobel Prize Winner Who Integrated Innovation into Economic Models

The merit of Paul Romer, former chief economist at the World Bank and Professor of Economics at the Stern School of Business at New York University, is the formalization of the role that innovation plays in economic growth. «Before him», explains Guido Tabellini, Professor of Economics at Bocconi, in this video, «in macroeconomic models technological progress was seen as an external force, Romer made it clear how to incorporate technical progress and the accumulation of knowledge in economic models». (CLICK HERE to see the video)

«And he did so by formalizing a simple intuition: that the most important and challenging phase of innovation is the conception of the idea, while its application is not expensive. This is what happens in the development of an operating system: difficult and expensive to conceive, but simple and not expensive to replicate on a multitude of computers».