pgs 382-383

Teaching Economics

In this section of the book the author again mentions the exhibits at the San Francisco Hilton on January 5^th, 1996. Many well known Economists were at this with the author focusing on that of John Taylor and his approach.

A portion of this section also goes into reasons why economists write texts including, “they want to make a lot of money, they love to teach, because they want to influence the way the subject matter of economics is generally understood, etc. According to the author at this time, namely the meetings in 1996, the hunt for a successor to Paul Sameulson’s text was “well under way.”

pg2 274-276

274-276

Romer’s “crazy explanations” paper in 1987 created more of a confusion than a help on the debate that ravaged the topic. Many felt that convergence was to big of question to adequately be answered at the time. The author brings out that the first bit of 1987 were tough on Romer with him not having much success up to that point and him seriously considering dropping economics to become a political consultant working for his father who was Governor of Colorado

pgs 219-223

219-223

Allyn Young’s lecture, “Increasing Returns and Economic Progress” comes into the forefront of this section. In this lecture Young basically brings out that Adam Smith “missed the point” in the Pin Factory. He didn’t bring out the relationship of the pin factory and it’s neighbors.

To me it seemed like this section was trying to bring out the idea of how technological growth, growth in the industries, as well as other factors in growth was something that you couldn’t see inside one single industry. But rather you needed to look at the relationship that industry had to all the neighboring ones as well. He used the examples of dis-integration rather than integration, specialization, and also how other economists had just taken growth for granted as a naturally occurring thing of the time rather than looking back and seeing that there were periods of little growth as well as those with greater growth.

Pg 201-203

201-203

This section talks about how Romer took the opposite side of the growth argument of other economists during the 1970’s. The majority of economists had a doomsday idea of it all. The author talks about how it wasn’t quite as bad as the Great Depression or other times in history but it was still a common feeling. Romer took the opposite approach bringing out that there had been growth over the recent history and that he felt it would continue. He stated that he was trying to cause a problem but rather he was trying to reconcile a contradiction in ideas and things he was seeing in economic beliefs and the data he had.

The Robert Lucas effect

p. 235-237

At the age of 48, Robert Lucas had become of of the most influential economic theorists in the world. His views on the importance of model altering and forward-looking on human behavior was as key point that the rising generation of macroeconomists thrive on. After teaching at the University of Chicago for about 12 years, he headed for Cambridge England to lecture there about his theories. One of the biggest conflicts he had was his arguments about alternative modeling strategies that he often had with Robert Solow about his model and what needs to happen to improve it.

The Modern City Puzzle

p.245-247

Why do big stay together so well? A city is simply a collection of factors of production-capital, land, and labor- and land seems to always be less expensive outside the city. Yet people don't spread out as fast evenly over the landscape. Robert Lucas was troubled by this phenomenon as well. To help answer this curiosity he had, he turned to the work of an economist named Jane Jacobs. Jacobs claims that a city is a settlement that produces its own growth. It thrives off of building new work onto the old. It also is seen as having a higher social status if you live in the city. For example, people are willing to pay a lot of money to have the title of living in Manhattan, even though it doesn't really benefit them that much more other than being close to shopping.

Two halfs of a whole

p. 250-253

When Robert Lucas traveled to Tel Aviv to present his new ideas on the spill overs of human capital, he came into contact with Paul Krugmans paper on increasing returns and trade. On the surface, the papers could not be any more different. But at the heart was a model that entire countries got ahead on the basis of manufacturing specialties usually incorporated only at the firm level. It helped bring to light that the spill overs arose from the history of any particular neighborhood rather than from the increasing returns of monopolistic competition characterized in Krugmans work in trade. The result of Marshillian spillovers.