Tuesday, February 14, 2012

Callahan on Romer

Gene writes: "I heard Paul Romer present yesterday at NYU. He gave a very interesting talk on his plans for charter cities. But he began his talk claiming something very strange."First of all," he said, "think about shaking hands. Shaking hands, I think we can all agree, is an obviously inefficient norm. It's a major way to transmit disease." (I quote from memory!)

Well, there certainly is that downsize to shaking hands. But it also provides social bonding, human contact, acts as a signaling device ("he had a good, firm handshake"), and probably more of which I am not thinking.

So how does Romer know that these benefits do not outweigh the costs? "

It's not the only strange thing Paul Romer says. He's also wants to subsidize the supply of new scientists and engineers. Romer is a fantastic macroeconomist - I have big reservations about his labor economics. Anyway, I anticipate that once the chapters that Hal and I are writing finally get published, he'll change his tune.


  1. When is the NBER book that you're making a contribution to supposed to come out? Just curious.

    1. There have been some delays in getting data from the BLS that one or two of the chapters are using... looks like our authors' conference for the final draft might be in June, then they'll go through an external review process, so then hopefully 2013 sometimes (I'm guessing later rather than earlier).

  2. Even on Charter Cities, the problem with Romer's proposal (which is based in part on medieval precedents) is that he is not medieval enough.


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