Chapter 19: 253-256

The Chicago faculty was thrilled for the publication of Romer’s paper, especially three professors known as The Trio. The Trio was three young economists (Andrei Shleifer, Kevin Murphy and Robert Vishny) who wrote many papers together that showed how increasing returns can help clarify controversial matters. Working off Romer’s research done on increasing returns, The Trio wrote Industrialization and the Big Push, which demonstrated how spillovers can create enough economic growth to be relied upon by governments. Vladimir Lenin based his economic policy upon the “big push” idea. His belief was that huge investments in industrial production would free Russia from its tradition of agricultural production. Economists, like Paul Rosenstein-Rodin, believed a big push would work in nearly any underdeveloped country but that only the government could be expected to “have deep enough pockets to bear large fixed costs and enough power to force others to comply.” In the early 1900’s, this was an idea largely ignored, but by 1987, when The Trio published their paper, it was gaining popularity. Now, thanks to the use of mathematics, young economists started flocking to the theory of increasing returns.