The Butcher and the Storyteller: Reflections on the 2018 Nobel Memorial Prize Awarded to Paul Romer

Abstract

This short paper offers some reflections on the 2018 Nobel Memorial Prize awarded to Paul Romer. We describe the intellectual path that led him to embed endogenously-generated knowledge in growth models, a contribution that we believe was foremost a mathematical achievement. Accordingly, we examine Romer’s subsequent methodological statements on how mathematical is used and abused in theorizing. We locate his disagreement with other economists, in particular Robert Lucas, in their respective beliefs about the right degree of correspondence between real world objects, economic concepts and their mathematical representation. Romer endorses a much debated millennium-old vision of knowledge whereby the scientist needs to “carve the system at its joint” like a skilled “butcher.” Lucas rather conceives himself as a “story-teller” who build “artificial mechanisms” to highlight real-world phenomena.

Keywords: Romer, Lucas, Endogeneous Growth, Mathiness, Modeling

JEL Classification: A10, A13, A14, B20, B29, B31