Romer Rules!

Paul Romer of Stanford University is one of my favorite economists. Romer is the founder of Aplia and a pioneer in the new growth theory that was discussed in Chapter 8 of your e-book. Romer’s father, Roy Romer, was the former Governor of Colorado and the Superintendent of the LA Unified School District. I was fortunate to have dinner with Paul Romer a few years back and I can tell you in spite of his brilliance he is a truly nice guy. I have no doubt that he will win the Nobel Prize in economics for his contributions to growth theory.

To learn more about Romer’s work on economic growth see David Warsh's book Knowledge and the Wealth of Nations , or look at the Economist article "The Growth of Growth Theory" in its 18 May 2006 issue. . You can also listen to a recent podcast interview with Romer in the excellent EconTalk series hosted by Russ Roberts. Or alternatively you can read the transcript of the EconTalk interview with Professor Romer.

Once macro minds start thinking about economic growth it is hard to think about anything else. You may want to consider a topic relating to economic growth as the subject of your Discussion Board posting.

Extra Credit: Address the question: Is Aplia an effective tool for improving student learning? Do the Aplia homework assignments increase your learning potential? I don’t want to hear whining that the questions in Aplia are hard. The questions on Aplia may seem hard, but they are not any harder than they would be in any standard transferable economics course. What I want to know is if you think that Aplia is a technology that leads to better educational outcomes. What do you like about Aplia? What are its weaknesses? Do you have any suggestions for improvement? Aplia’s pitch to professors is that the students do more work and the professor does less. I am also interested in knowing what other techniques that you think are useful to create a successful online learning environment. I have set up a forum on the Discussion Board called Aplia Forum. I will give between one and four points for every thoughtful post on Aplia and creating a thriving online learning environment. One post per student please. The number of points that you will be awarded to your Discussion Board Extra Credit account depends on the length and quality of your post. To earn the maximum of four points your post should be thoughtful and several paragraphs in length.

It Really Pays to Stay in School-A Really Long Time

There was a column in yesterday’s Wall Street Journal that every college student should read. The article is entitled “Why It Takes a Doctorate to Beat Inflation”. Only a small percentage of workers in our economy have seen their real incomes rise in the past five years. Who are they? Let me share some pithy quotes from the thought provoking piece by David Wessel.

“The typical American worker with a four-year college degree earns a lot more money than a similar worker who didn't go beyond high school -- 45% more. Education does pay. But in today's economy, getting a bachelor's degree is no longer a guarantee of raises big enough to beat inflation.

Although the best-paid college grads are doing well, wages of college grads have fallen on average, after adjusting for inflation, in the past five years. The only group that enjoyed rising wages between 2000 ... and 2005 ... were the small slice with graduate degrees….

Think about that: Even though the economy and productivity have been growing smartly, lots of workers who played by the rules and went the distance to get a four-year college degree aren't getting ahead. ... The very best-paid workers are getting the bulk of the raises. ...

[I]n the middle -- where many four-year college graduates work -- ... imports, overseas outsourcing and technology seem ... to be reducing U.S. employer demand ... significantly, and thus restraining wages. That is the kind of shift in the tectonic plates of the economy that produces political earthquakes.”

Professor MacroMind knows a lot of PhDs (he has one himself). I’ve never noticed that my friends with PhDs were richer monetarily than the folks that I know who don’t hold their doctorate. But it looks like the revenge of the geeks took place in the first five years of the millennium. (See the accompanying chart.) PhDs make $93,593 on average, compared to $68,302 for people with a Master's degree and $56,740 for garden variety college grads. M.B.A.s, lawyers, and medical doctors do even better averaging 120 k. You can check the numbers at the source. You can listen to an interview with the author of the article concerning the growing pay disparity here.

Have a good weekend, studying!?