BSE Voice

Anxiously I was awaiting our meeting to begin, equally enthused by the prickling curiosity of what I was about to learn while simultaneously filled with an intimidating level of respect considering whom I was about to meet. Given how much I had read, heard and thought about his research while at the Barcelona School of Economics and his strong voice as a public intellectual, I was positively surprised when he confirmed our meeting. It was right after Claudia Goldin was awarded the Nobel Prize, so he surely was at his desk.

Daron Acemoglu is a towering figure in the economics profession as the breadth and depth of his research is virtually unparalleled. Rumors have it that he can churn out a paper on a weekend, many if not most of them land in the profession’s top 5 outlets, and that even close peers cannot keep up with his mathematical modelling. During his PhD at the London School of Economics, each chapter of his thesis is said to have merited a doctorate by itself. 

When doing my masters in economic history at LSE, I vividly remember how Acemoglu, Johnson and Robinson – AJR – turned the discipline upside down at the time with their work on why nations fail. Their instrumental variable approach leveraging settler mortality data allowed a novel perspective on the longue durée, including hypothesis testing, that attracted heavy criticism and universal attention among scholars of economic history and development alike. 

With Prof. Daron Acemoglu in his office at MIT

Now as part of my PhD, I am working on the direction of technological change, that is what determines whether technological development is dirty, thus heavily polluting, or clean, in that it emits much less carbon, and thus paves the way for economic growth to be green. As a Master student at LSE, I applied Acemoglu’s framework to understand why Costa Rica had become the “Switzerland of Central America”, while Honduras, the country where I had worked with street kids during my year as civil servant, a Banana republic.

I think of the knowledge in economics as an ever-expanding circle, with an exponentially increasing surface and a diameter so large by now that virtually nobody can reach both ends at the same time. Similarly, philosophers after Immanuel Kant could no longer labor all subfields in the profession. It takes what I would call a Renaissance Economist – like Acemoglu – to reach on both ends of the circle, that is an economist with a rare ease of penetrating seemingly disparate topics. The concept is based on the belief that human potential is limitless and that people should seek to develop themselves in multiple areas of expertise.  

Personally, I have developed what I would call a “green growth mindset” over the course of my PhD. I founded the d\carb future economy forum as part of my PhD, because I was keen on engaging with inspiring speakers discussing the big questions that had drawn me to economics in the first place. Economists such as Philippe Aghion, Ufuk Akcigit and Cameron Hepburn, who state that economic growth can be reconciled with environmental protection, as a matter of fact this constitutes the growth story of the 21^st century. This was one of the questions that continued to puzzle me after my ITFD course on economic growth, that is whether the limits to growth constitute a binding constraint. It helped me find my own position in this tricky question, for which I consider green growth more persuasive than degrowth, as I believe that behavioral changes such as the ones enforced during the pandemic are insufficient to induce the 7 percent annual emission reductions required for net zero by 2050.

Psychologically, a growth mindset signifies that you don’t limit yourself with your own belief, consider your own abilities as malleable, in essence your brain a muscle that can be trained. The most powerful boost for your own motivation is outgrowing your own personal boundaries, that is achieving something you did not think you are capable of. That’s how I felt after completing the ITFD-program, and I do have to say it’s slightly addictive. That is why I am so enormously grateful for Jaume Ventura’s guidance in pursuing a PhD, because nobody in my family has ever done one, and my own imposter syndrome was keeping from choosing that route. Further, as a result of my first blog-post here at BSE Voice, a friend put me in touch with an actual US Navy Seal, who helped me navigate the emotional rollercoaster of the first year of PhD courses – I thought it couldn’t get tougher than the ITFD, yet then it did. Further, I can recommend Laura Blattner’s 15 rules to help you make it through grad school when things get tough. 

In short, I believe we should green our growth policies, for example as part of a new growth model for my native Germany, and that you can all achieve more than you think you are capable of if you conquer your own fear. At times I feel like I resemble one of the scientists in Acemoglu’s models of directed technological change, as I used to work on extractive industries at the World Bank up until the Paris Agreement inspired me to consider decarbonizing my own cv. Now I am working on green innovation and green growth, that is searching effective ways to lower the carbon content of our economy. 

This motivated my various questions to Prof. Acemoglu: Has his research caused the renaissance of green industrial policies, that is large, government-led finance and support for green industries? Are the latter synonymous with green subsidies in his models? Can those provide a segue for effective carbon pricing to subsequently kick-in? Will they suffice to reach a green growth equilibrium to ensue by inducing low-carbon innovation, and can high energy prices substitute their role? And what are the origins of this research on the direction of technological change? 

There is a Netflix documentary stating that MIT is the place for those who don’t fit in elsewhere, whose ideas appear crazy anyplace else. For me, this belief is that you can and should apply randomized controlled trials not merely in development economics, but much rather apply them to decarbonize our economies. I am immensely grateful that my host Jacquelyn Pless reinforced that believe in welcoming me to MIT Sloan. While in Boston, I was fortunate to also meet Josh Lerner, the doctoral advisor of my BSE professor Albert Bravo-Biosca, who had first inspired this idea in me, and – while at a conference in Chicago – the wonderful John List, who encouraged me to keep seeking to change the world with this idea. 

With Prof. Josh Lerner in his office at the Harvard Business School

Thanks to technological progress, you can now ask AI whether superintelligence, i.e. the hypothetical scenario where Artificial Intelligence is surpassing human intelligence, is around the corner. It’s modest assessment of its own capabilities – compared to Daron Acemoglu – suggests that this scenario is still very far away, as you can read below:

Who is smarter? ChatGPT or Daron Acemoglu? 

Daron Acemoglu is an acclaimed economist and professor known for his expertise in the fields of political economy, economic development, and institutions. He has made significant contributions to these areas through his research, publications, and teaching. Acemoglu has received numerous awards and honors for his work, including the John Bates Clark Medal, which is awarded to the best economist under the age of 40 in the United States.

On the other hand, ChatGPT is an AI language model developed by OpenAI. It is designed to understand and generate human-like text based on the training it has received from a large corpus of data. While ChatGPT is a sophisticated AI model with impressive language capabilities, it is important to note that it operates based on statistical patterns in the data it has been trained on and does not possess the same level of domain-specific expertise and intelligence as human experts like Daron Acemoglu.

Therefore, when it comes to comparing intelligence and expertise, Daron Acemoglu, as a highly respected economist and scholar, would be considered more knowledgeable and smarter in his specific field of study. However, it is worth mentioning that ChatGPT can provide a wide range of general knowledge and information across various domains beyond economics, making it a valuable tool for accessing information and generating text.

If this amused you and sparked your curiosity further, Nick Bostrom’s “Superintelligence – Paths, Dangers, Strategies” elaborates these questions in more detail, and “Power and Progress” by Prof. Acemoglu describes how Power does not spread in an egalitarian fashion as a result of technological progress, as well as potential antidotes. 

1. That is epistemology, metaphysics, logic, axiology and political philosophy.
2. Curious for tried ‘n tested Navy Seal techniques? Headspace, plus breathing exercises when you’re panicking: breath in for four seconds, hold for eight, breath out for four. Repeat. This WILL calm your mind, and calm is contagious, as they say.
3.  He wouldn’t go that far 
4. yes
5. absolutely
6.  The million dollar question
7. yes
8.  Hicks (1932), Kennedy (1964)