Paul Romer

Paul Romer is the new chief economist at the World Bank.

He said “This position gives me a unique chance to learn about the thing that fascinates me most – producing knowledge that is useful in the sense that it yields benefits on the scale of billions of people. If you are familiar with my early work on ideas as nonrival goods, you can appreciate why scale is so compelling to me.”

Paul Romer is that rare breed, an economist who believes in technology.

He once said that innovation will carry on until the sun explodes. He said “Just ask how many things we could make by taking the elements from the periodic table and mixing them together. There’s a simple mathematical calculation: it’s 10 followed by 30 zeros. In contrast, 10 followed by 19 zeros is about how much time has elapsed since the universe was created.”

He is also a fan of how small changes can, when added up, have a massive impact on the global economy. He cites as an example standard sized lids on cups in coffee shops.

He once said: “In many coffee shops, you can now use the same size lid for medium and large paper coffee cups. Before, they each had a separate lid. A small change in the design of the cups means that a shop can serve customers at lower cost. Storeowners need to manage the inventory for only one type of lid. Employees can replenish supplies more quickly.

“Big discoveries–the transistor, antibiotics, the internal combustion engine–get most of the attention, but improvements in standards of living also spring from untold numbers of discoveries about something as simple as the shape to use when turning tree pulp into drinking cups.”

In explaining why he was so happy to accept the World Bank job, Romer said: “It is an example of something I never thought possible: an intellectually exciting job in Washington DC that I am eager to accept. Proof yet again of things I have said before, perhaps without fully appreciating that “we” and “us” includes me: More things are possible than we realise. Often, what holds us back is a failure of imagination."