Paul Romer – Congrats to the New Nobel Laureate

Go Lean Commentary

Some people make great accomplishments, to the point that they are recognized … globally.

Sometimes, a person greatest accomplishment is that they inspire others.

Every now and then, one person does both.

The world is celebrating the accomplishment of American Economist and University Professor Dr. Paul Romer; he has just been awarded the Nobel Prize for Economics.


This is a Big Deal for him … and for us in the Caribbean.

Wait, what?

Dr. Romer gets this award today in 2018, but back in 2013, he inspired an important movement in the Caribbean. His writings inspired the book Go Lean…Caribbean. He coined the following phrases, as recorded in the Go Lean book (Page 8):

“A crisis is a terrible thing to waste”

Economic growth occurs whenever people take resources and re-arrange them in ways that are more valuable

Before examining this inspiration and motivation, we must first give Dr. Romer his “props”. See the aligning news article here from the Economist Magazine:

Title: Paul Romer and William Nordhaus win the economics Nobel
Both have studied the causes and consequences of growth
October 11, 2018 – WHY do economies grow, and why might growth outstrip the natural world’s capacity to sustain it? There are few more important questions in economics. The answers require a working grasp of the mechanisms underlying growth. For the progress that the profession has made towards that understanding, it owes a particular debt to Paul Romer and William Nordhaus, this year’s winners of the Nobel prize in economic sciences.

Although both scholars have long been talked of as potential winners, they are not an obvious pairing for the prize. Mr Romer tends to be described as a growth theorist; Mr Nordhaus’s work is in the field of environmental economics. The Sveriges Riksbank, which awards the economics Nobel, found a common thread in their work incorporating two crucial processes—knowledge creation and climate change, respectively—into models of economic growth. But what most links their work is that they have improved the way the profession thinks about impossibly complex systems, while also revealing the extent of its ignorance.

The influence of both men extends beyond their most noted scholarly achievements. Mr Romer’s career has been especially varied. He left academia in the early 2000s to found an educational-software company. More recently he served as the World Bank’s chief economist (his tenure ended abruptly when staffers bridled at his management style, which included an insistence on more crisply written reports). But it is his analysis of economic growth that has had the greatest impact.

Economists used to think that sustained long-run growth depended on technological progress, which in turn relied on the creation of new ideas. They struggled, however, to explain convincingly how markets generated and propagated those ideas. When Mr Romer came into economics, most prominent models of growth relied on “exogenous” technological progress: it was simply assumed, rather than generated by the models’ equations.

Dissatisfied by this state of affairs, he sought answers by probing the non-rivalrous nature of knowledge: the fact that ideas, once created, can be endlessly exploited. The firms or individuals that come up with new ideas can only ever capture a small share of the benefits arising from them; before long, competitors copy the original brainwave and whittle away innovators’ profits. In Mr Romer’s work, markets are capable of generating new ideas. But the pace at which they are generated, and the way in which they are translated into growth, depends on other factors—such as state support for research and development, or the protection of intellectual property.

The “endogenous” growth models produced by Mr Romer, and by others influenced by him, were once hailed as a critical step towards understanding patterns of economic growth across the globe. They have not quite fulfilled that promise: knowledge may be necessary for growth, but it is clearly not sufficient. But their shortcomings have themselves raised important questions about the stubborn disparities in growth rates. Why are some countries able to exploit existing ideas and grow, while others are not? Should policymakers who want to boost growth focus on policies that support the creation of knowledge or on those that break down barriers to the exploitation of existing knowledge? Or does it make most sense to shift people and resources from the parts of the world that struggle to grow to those that do not? By provoking such questions, Mr Romer’s work identified a rich vein for other researchers to mine.

Mr Nordhaus, for his part, has been a towering figure in the debate about how to respond to one of the biggest challenges that humanity faces. When he was beginning his career in the early 1970s, awareness of the dangers of environmental damage and the threat posed by climate change was just starting to grow. Understanding the economic costs such damage imposes is essential to answering the question of how much society should be willing to pay to avert it.

Mr Nordhaus applied himself to solving this problem. That meant working out the complex interactions between carbon emissions, global temperature and economic growth. He combined mathematical descriptions of both climate and economic activity into “integrated assessment models”. This allowed him to project how different trajectories for the world’s carbon emissions would produce different global temperatures. That, in turn, allowed him to estimate the likely costs of these different scenarios—and thus what level of reduction in emissions would be economically optimal. He was the first to suggest that warming should be limited to no more than 2°C higher than the world’s pre-industrial temperature. Models like his have become the linchpin of most analysis of the cost of climate change.

The known world
As with Mr Romer’s work, Mr Nordhaus’s contributions are also notable for the lessons imparted by their shortcomings. Four decades after he began publishing research on climate change, the limits to scholars’ predictive abilities have become abundantly clear. Indeed, his work has prompted vigorous debate about how best to think through the huge uncertainties associated with global warming—from how emissions translate into higher temperatures to how well society can adapt to rapid changes in climate.

Policymakers prefer the comfort of hard numbers. But the often-unfathomable complexity of human society and natural processes may mean that other guides are sometimes needed to set policy, from the precautionary principle to moral reasoning. Ironically, Mr Nordhaus’s computations, like those of Mr Romer, made that awareness possible.

Above all, both of this year’s prize-winners tackled problems that the field both could not understand and could not afford not to understand. They blazed trails that scholars continue to follow—to the benefit of economics and humanity.

This article appeared in the Finance and economics section of the print edition under the headline “Greener pastures”

Source: Retrieved October 12, 2018 from

As for Dr. Romer’s sphere of influence:

Romer was named one of America’s 25 most influential people by Time magazine in 1997.[10]

According to this encyclopedic source, his trademark quotation was stated in 2004…

Romer is credited with the quote “A crisis is a terrible thing to waste,” which he said during a November 2004 venture-capitalist meeting in California. Although he was referring to the rapidly rising education levels in other countries compared to the United States, the quote became a rallying concept for economists and consultants looking for constructive opportunities amid the Great Recession.[17]

So when the movement behind the Go Lean book, came “under his spell”, he had a long and noble track record. Now he is a Nobel Laureate.

So this one man had made a difference in the world, and even in our Caribbean world. The movement behind the book Go Lean…Caribbean – available to download for free – has consistently asserted that one man or one woman can make a difference in society. Though Dr. Romer is not in the Caribbean, nor from the Caribbean, we can still look, listen and learn from his contributions. His pioneering principle of Endogenous growth theory is spot-on for the economic policy that we need to adopt for the Caribbean reboot. See the definition here:

Endogenous growth theory holds that economic growth is primarily the result of endogenous and not external forces [or exogenous].[1] Endogenous growth theory holds that investment in human capital, innovation, and knowledge are significant contributors to economic growth.

Now to learn and apply this lesson. In plain-speak, education directly elevates economics. The Go Lean book quotes this accepted fact on Page 258:

… both public and private returns to investment in education are positive—at both the individual and economy-wide levels

The Go Lean book developed the argument of one person making a difference (Page 122). It specifically relates:

An advocacy is an act of pleading for, supporting, or recommending a cause or subject. For this book, it’s a situational analysis, strategy or tactic for dealing with a narrowly defined subject.

Advocacies are not uncommon in modern history. There are many that have defined generations and personalities. Consider these notable examples from the last two centuries in different locales around the world:

  • Frederick Douglas
  • Mohandas Gandhi
  • Martin Luther King
  • Nelson Mandela
  • Cesar Chavez
  • Candice Lightner

The Go Lean book seeks to advocate and elevate the Caribbean, and the people who love our homeland. Yet still, we can learn lessons from the Nobel-prize-winning Economist and direct our regional stakeholders to a Way Forward based on best-practices of home-grown and home-targeted education. The book serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU), to move our society to a brighter future, by elevating our societal engines – for all member-states. This CU/Go Lean roadmap has these 3 prime directives:

  • Optimization of the economic engines in order to grow the regional economy to $800 Billion and create 2.2 million new jobs.
  • Establishment of a security apparatus to ensure public safety and protect the resultant economic engines.
  • Improve Caribbean governance to support these engines, including a separation-of-powers between the member-states and CU federal agencies.

The book stresses that reforming and transforming the Caribbean societal engines must be a regional pursuit – we must ensure that we have the best education option available to our people, but in a way that does not jeopardize their remaining in their Caribbean homeland. This challenge to guarantee our “brain does not drain” is too big for any one Caribbean member-state to contend with alone. This was an early motivation for the roadmap, as pronounced in the opening Declaration of Interdependence (Pages 12 – 14):

xi. Whereas all men are entitled to the benefits of good governance in a free society, “new guards” must be enacted to dissuade the emergence of incompetence, corruption, nepotism and cronyism at the peril of the people’s best interest. The Federation must guarantee the executions of a social contract between government and the governed.

xxi. Whereas the preparation of our labor force can foster opportunities and dictate economic progress for current and future generations, the Federation must ensure that educational and job training opportunities are fully optimized for all residents of all member-states, with no partiality towards any gender or ethnic group. The Federation must recognize and facilitate excellence in many different fields of endeavor, including sciences, languages, arts, music and sports. This responsibility should be executed without incurring the risks of further human flight, as has been the past history.

xxxiii. Whereas lessons can be learned and applied from the study of the recent history of other societies, the Federation must formalize statutes and organizational dimensions to avoid the pitfalls of communities like East Germany, Detroit, Indian (Native American) Reservations, Egypt and the previous West Indies Federation. On the other hand, the Federation must also implement the good examples learned from developments/ communities …

The Go Lean book provides 370-pages of turn-by-turn instructions on “how” to adopt new community ethos, plus the strategies, tactics, implementations and advocacies to execute so as to reboot, reform and transform the societal engines of Caribbean society.

The Go Lean movement calls on every man, woman and child in the Caribbean to be an advocate and a champion, or at least appreciate the championing efforts of previous advocates. Their examples can truly help us today with our passions and purpose. Consider this sample of prior blog/commentaries where advocates and role models have been elaborated upon: Viola Desmond – One Woman Made a Difference Carter Woodson – One Man Made a Difference … for Black History Oscar López Rivera – The ‘Nelson Mandela’ of the Caribbean? Caribbean Roots: Al Roker – ‘Climate Change’ Defender Caribbean Roots: John Carlos – The Man. The Moment. The Movement Caribbean Roots: Esther Rolle of ‘Good Times’ Caribbean Roots: Sammy Davis, Jr. Edward Snowden – One Person Making a Difference Remembering Marcus Garvey: Still Relevant Today The NBA’s Tim Duncan – Champion On and Off the Court YouTube Millionaire: ‘Tipsy Bartender’ Frederick Douglass: Role Model for Single Cause – Death or Diaspora Bob Marley: The legend lives on!

Thank you Dr. Paul Romer, for your good role model. Congratulations on your Nobel Prize award. You deserve the recognition. (See the explanation VIDEO in the Appendix below).

In your role as a professor, you have not just taught your classes, but rather the whole world. We say to you as we do to all of our own Caribbean teachers; we say (Go Lean book Valedictions on Page 252):

Thank you for your service, for molding young minds.

The movement behind Go Lean book, the planners of a new Caribbean stresses that a ‘change is going to come’. We have endured failure for far too long; we have seen what works and what does not. We want to learn from Nobel Laureates and apply their lessons as mitigations, though it may be heavy-lifting.

Yes, our Caribbean society is in crisis right now, but as Dr. Romer enunciated:

A crisis is a terrible thing to waste.

We urged every Caribbean stakeholder to lean-in to this Go Lean roadmap to make the homeland a better place to live, work and play. 🙂

Sign the petition to lean-in for this roadmap for the Caribbean Union Trade Federation.


Appendix VIDEO – The Nobel Prize to Paul Romer –

Published on Oct 8, 2018 – Guido Tabellini, economist at Bocconi, explains why Romer has won the Nobel Prize for Economics.

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