American Economists William Nordhaus and Paul Romer Bag Economics Nobel Prize: Here’s All You Need To Know A monument to Nobel Prize founder Alfred Nobel (Mario Tama/Getty Images)

The Royal Swedish Academy of Sciences announced the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2018, to William D. Nordhaus and Paul M. Romer, reported Wall Street Journal.

William D. Nordhaus of Yale University, New Haven, USA was awarded “for integrating climate change into long-run macroeconomic analysis”, and Paul M. Romer, NYU Stern School of Business, New York, USA “for integrating technological innovations into long-run macroeconomic analysis”, said the official announcement.

The models that Nordhaus and Romer created have helped with the development of economic growth, and combatting climate change, said the committee.

Romer demonstrated how knowledge could function as a driver of long-term economic growth. Macroeconomic research models had earlier emphasised technological innovation as the primary driver of economic growth but had not explained the connection between economic decisions and market conditions in determining the creation of new technologies. Paul Romer solved this problem by demonstrating how economic forces drive new ideas, necessitates research and innovations in firms.

Nordhaus’ research deal with interactions between society and nature. In the mid-1990s, he became the first person to create an integrated assessment model, i.e. a quantitative model that describes the global reciprocity between climate change and the economy. His model tries to integrate theories an heuristics from physics, chemistry and economics. This theory can be used to examine the consequences of climate policy interventions, for example, carbon taxes.

An Appeal...

Dear Reader,

As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.

We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

Become A Patron
Become A Subscriber