YouSaid · the spoken record

Paul Romer

lines on the record: 72
first: 2020-05-20
most recent: 2020-05-20
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Without imposing a lot of theory onto the estimation process. And I just found it interesting to see that tension in another field. From the outside, the way it looks to me is it's good to have both of those wings active in a discipline. And it's good to have them kind of in contention with each other. And if I have a criticism of macro in economics, it's like the criticism in epidemiology. We may have biased things a little bit too much towards the models and we're not giving enough weight to just the facts themselves. And I think that's because it's actually easier to do models than to look at data. So we need to have a little bit of collective pressure to, yeah, yeah, that's what your theory says, but let's look at the numbers.”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, there's actually an interesting parallel in epidemiology with a technical kind of issue in economics. In macro, we shifted towards model-based reasoning about macroeconomics. So representative agent, you know, the whole rational expectations movement was a kind of a shift towards let's see what the models say rather than let's see what the data says In epidemiology, there's a very well established model, this SIR model that is behind a lot of these predictions, but there's alternative that the Institute for Health Metrics and Evaluation, which has this model that's been very influential, widely watched these days. The IMHE is using a much more data-driven approach, kind of a curve fitting approach. It's almost like old style Keynesian macro where you just say, well, let's just kind of fit something to the numbers and see what comes out of that.”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“Not the only thing I think we should be looking at. And I'm not sure what are the other predictors, but I don't think just kind of practice in math is going to lead to a successful career in economics.”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“But instead of asking whether I'm personally to blame or personally a bad person, when I'm stepping back and asking is, did we create a system that let someone like Greenspan make recommendations under the cover of science? Like I'm a scientist, I'm telling you how it should go. But those recommendations were really based on kind of a worldview he got from a novel by Ayn Rand. There was no technical scientific basis for them and they turned out to be really incredibly harmful. So we need to make sure that this system that we're building isn't misused in that way.”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, you know, there's a speech Greenspan gave where he doesn't cite me, but he could. It's all about, you know, we can't have regulation because we got to have growth. Growth comes from innovation. Regulation slows innovation. It'll stop creative destruction. We just have to live with creative destruction. So I feel like some of my ideas”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think partly when the pharmaceutical firms that were trying to make money off of OxyContin and these opioid-based painkillers, when they went to Congress to try and stop the DEA from shutting them down, what they used was the language of economics. You have to have innovation. You got to let the market proceed. There'll be some creative destruction, but you have to let us do our thing. You can't interfere. It'll be bad for growth. To the extent that we lent cover indirectly for those kinds of arguments against regulation, so firms could make money killing people. You know, we really did something bad”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“You just look at the one of the most basic ways to measure progress, how long do people live? People in the United States are not living as long as they used to. Life expectancy is declining and life expectancy hasn't been keeping up with other nations around the world.”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, but we still should have been saying, given the choices that voters are making, which reflect your preferences as voters, like supporting an owner-occupied housing, the regulatory choices that we are recommending as economists are actually exposing us to just massive, massive harm. And I don't remember the number off the top of my head. Haldane did some calculation where the cost, the worldwide cost of the financial crisis was, I think in like the hundreds of trillions of dollars. So this is a really huge, huge mistake. And we're still, I think, exposed to a financial system which could just blow up on us at any point in time. It's part of why the Fed has to be so active right now with providing funds. So deregulation, especially of financial markets, I think was harmful. And competition policy was a failure. And then the bottom line.”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“Systems of regulation that kept our financial system from being as fragile as it's become. And I think you look across the board at other types of regulation. We've failed to support the kinds of regulations that we need alongside of Pikuvian taxes. There's some bad things that people do bad in the sense they're inefficient. We can try and tax them. Other times you just use regulation, but one way or the other, we collectively want to stop people from doing things that are harmful.”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“To say the 1930s, and that's good. But let me kind of come back to what are the minus sides of this balance sheet. So I talked about antitrust and the failure of competition policy. The other one is in regulation. And if you ask me, who's my representative of somebody, an economist who overstepped, overreached, and did real harm, it's Alan Greenspan? Greenspan was this tireless advocate for cutting regulation. He was quoted at one point saying, he's never met a regulation that he thought was valuable. And he played a very important role in deregulating the financial system in the run-up, you know, for decades running up to the financial crisis. That financial crisis cost us an enormous amount worldwide. And it's because we unwound”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“When I was talking about this cost-benefit exercise, one of the positives we mentioned was in the sphere of development and catch-up. I think another is in stabilization policy. The kind of practical macro policy as practiced at the Fed is much better now than it was during the 1930s. And we get real benefits from that. So I think it's good that the Fed is trying to make sure that we don't have this cascade of bankruptcies. There's no question that economists have learned something and contributed to society. Just as a side note, I've been critical of the kind of the more theoretical rational expectations macro, but set that aside because that really hasn't had that much impact on policy. So macro policy is practiced at the Fed or is practiced by the Congress right now is, I think, a reflection of things we've learned relative to.”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“But I think there's actually enormous value in norms that are kind of self-enforcing. So suppose people think litter is bad. Suppose they think it's bad when other people litter. So they'll kind of scold or criticize when they see somebody litter. Then without police powers, without courts, without taxes, you actually get the outcome we want, which is we live in a world with no litter. And if we lost those norms, we got to overlay these more heavy, expensive kind of governmental solutions.”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“We shouldn't litter because it was inconsiderate and was just wrong. Let's say Fair convinces us I can litter if I want to. It's somebody else's problem to deal with the litter. That kind of, let's say, fair would be bad because we'd live in a world that was like full of trash all over the place. And I think in more important areas, economists have been inattentive to the effects that their policies have had on norms.”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“Of efficiency. If everybody thought this was the right thing to do, then we would actually all be better off in some objective sense. So those issues weigh heavily in my thinking about policies. Economists have been a little slow to take those up, but I don't know that that's, I mean, I think that's, frankly, I guess that is a part of the problem, I think, with economic analysis, because many of the arguments about, say, like allowing the market to run and giving people more freedom make more sense if when you do that, you don't change norms. But if when you do that, you encourage norms that are destructive, that kind of more or less fair approach can be harmful. Let me take a trivial example. Suppose laissez-faire, the promulgation of laissez-faire makes everybody feel like it's okay to litter. So we used to have a norm that...”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think all of us have some notions about self-interest and then well-being of those around us. Everything else equal, like if our position is the same, we're somewhat happier if those around us are happier as well. Different of us have either a bigger or smaller circle of those we care about. So there's some mixture of making sure everybody is doing okay and then making sure I'm doing okay. That's the first thing that I look at as a voter. But I also look at this is I think a little bit of a tangent relative to your question. But I also look at kind of the question of what direction will this policy take our norms, our beliefs about right and wrong? I think those change. I think there's some beliefs about right and wrong which are better in an objective sense in the sense that we economists think of”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“A lot more than we realize. Certainly, some members of the profession get into that mode. And I think they've done really quite a bit of harm when they did that.”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, yeah. And again, part of the, in some sense, the main point of the article that I'm making is that economists need to accept that our role is that of the technical advisor. We can say if you apply a carbon tax, carbon emissions will go down, here's what other effects we think they'll have. But it's up to you, the voters, to decide whether you want to follow that policy or not. So if the voters don't follow us, I think to a first approximation, that's not really our responsibility. And what I'm critical of is this tendency for economists to assume the kind of the responsibility of philosopher King and saying to voters, well, we know better what a society should be like, what society should do. Listen to us, we'll tell you the way things should be, we'll tell you what you should do. And in truth, I think we get into that mode.”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, my sense is that we'd be better off if we had five Amazons instead of one. And I don't see why we couldn't have five Amazons. If we as voters say this is the kind of society we want to live in, let's just aim for that. And same thing. I think the kind of the more worrisome positions are those of the tech firms that are so deeply connected now to many aspects of our lives and where there's really very little competition. A lot of opacity about what these firms actually do.”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“Of connection means that our system is more fragile than we realize. So a shock comes and things happen that we didn't anticipate. But again, that's part of learning about a very new type of economy, which is changing in real time. The ones that struck me as being particularly worrisome were first, I think the negative effect that economists have had in terms of protecting competition. Through the law and economics movement, we ratified this notion that big is okay as long as you can make some case that it's efficient. And the upshot is that I think because of technical economics and the arguments of economists, antitrust is much more tolerant now of dominant firms. And if we believe that competition is good in a whole bunch of ways, this could actually be very, very harmful.”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, I think this problem is an interesting one. I'd put it slightly different spin on it, but I think it's in the class of things of a failure to understand. And I don't think that's necessarily incomplete understanding. I don't think that's a sign of a science that's failed. That's a sign of a science which is just making progress. There's some things it knows that things it doesn't know. And so I don't view this one as a sign of a systemic problem that we're not doing it right in a sense. For what it's worth, we can come back and talk about this, but I think the lesson from the financial crisis, which we're learning again now, is one about the fragility of extensive interconnection. And so we've paid attention to trying to optimize efficiency with massive reliance on specialization and these kind of complicated supply chains. But the growth, the proliferation,”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. But so the origins of that article were that I read some books that said economists got a lot more influence and things got worse in the United States. And this was a really troubling argument for me because it's not easy to dismiss. What I concluded in that article saying we should do a cost-benefit analysis. Look at that the big things that economics has done well, the things it may have done badly, and just see how it works out. The point you're alluding to is something that my colleague Peter Henry has also made, which is that one of the areas where economics may really have been helpful is in the development process or the catch-up phase of growth. So that should go on the plus side, I think, on the benefit side, on the cost-benefit analysis. No question there. And there, I think there's some other ones that belong there too. My point was that there may have been some things that have”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so by the way, what about China? I mean, China caught up pretty well too, but they followed some of the basic insights from economics. And so they sell them.”
2020-05-20 · Conversations with Tyler · Paul Romer on a Culture of Science and Working Hard · IDENTIFIED FROM THE TRANSCRIPT · source