United States economists William Nordhaus and Paul Romer on Monday shared the 2018 Nobel Economics Prize for integrating innovation and climate with economic growth.
Nordhaus, a professor at Yale University, is best known for his work on climate economics. Romer, of New York University’s Stern School of Business, is a proponent of a theory that examines how the world can achieve sustainable growth.
“This year’s Laureates have designed methods for addressing some of our time’s most basic and pressing questions about how we create long-term sustained and sustainable economic growth,” the Royal Swedish Academy of Sciences said in a statement.
It said the pair has “significantly broadened the scope of economic analysis by constructing models that explain how the market economy interacts with nature and knowledge”.
Nordhaus developed an influential model that examines the consequences of climate policy interventions, including carbon taxes, on the global economy.
His work on climate was recognised the same day that a key United Nations panel warned that governments around the world must take “rapid, far-reaching and unprecedented changes” to avoid disastrous levels of global warming.
A former chief economist at the World Bank, Romer has shown that economic forces govern the willingness of companies to innovate. The concept is the foundation of what is now called “endogenous growth theory,” which states that new ideas and technology help drive economic activity.
Monday marked the 50th anniversary of the Nobel Prize in economics. The prize money of 9 million Swedish krona (Rs 7.31 crore) will be split equally between the winners.