Paul Romer shared the 2018 Nobel Prize in Economics for integrating technological innovations into long-run macroeconomic analysis.
Romer’s research explained how ideas and innovation can drive sustained economic growth. Unlike physical goods, ideas can often be reused by many people, so the production of knowledge creates special economic effects and may justify investment in research, education, and innovation.
He shared the prize with William Nordhaus, whose work analyzed climate change and its integration into long-run economic models. Romer’s contribution is associated with endogenous growth theory, which places technological progress inside the model rather than treating it solely as an unexplained outside force.
Romer was born in Denver and taught at several universities, including New York University and Stanford University. His work is distinct from Robert Solow’s earlier growth model, which treated technological progress as exogenous.