In the fall of 2011, I joined the Department of Economics at the NYU Stern School of Business. There I am starting a new program on the wave of urbanization that is now bringing billions of people into cities. In this century, the world’s urban population will gain more residents than in all of history to date. Because the world population will stabilize by the end of the century, humans now have a chance that we will never have again: to start dozens, perhaps even hundreds of new cities.

My previous post, which answered the question, “Why has growth has been speeding up?” made no use of the concept of excludability. So why did I make such a big deal about partial excludability in my 1990 paper? At least since Marshall handed down his Principles of Economics (arguably since Adam Smith told the story of the pin factory), economists have fretted about how to reconcile the increasing returns associated with what Smith called increases in “the extent of the market” with the obvious fact that in real economies, lots of firms of all sizes compete with each other.

In a previous post I described the evidence that pointed me toward the two big questions that guided me when I was building models of growth: Why has the rate of growth been speeding up over time? Why have so many poor countries failed to take advantage of the potential for rapid catch-up growth? A sign of a good mathematical model is that once you understand it, you can state the answer it suggests very simply.

The bar I set for a model is that it should yield answers we believe to questions that matter. For a model of growth, the two questions that matter most are: Speeding-up: Why has the rate of growth at the technological frontier been increasing over time? Missed Opportunities: Why have so many countries that start from far behind the frontier failed to achieve rapid catch-up growth?

In The Great Escape, Angus Deaton concludes by saying that he is “cautiously optimistic” about the future. In his review of the book, David Leonhardt captured its real spirit: “Deaton’s central message is deeply positive, almost gloriously so.” Deaton has made many contributions that make him such a great choice for today’s prize. (See here, here, and here.) I take special satisfaction from the validation it provides to Deaton’s optimism, which I would describe as careful, not cautious.