The Nobel Prize in Economic Sciences 2018 has been awarded to William Nordhaus and Paul Romer for their work on climate change and innovation on Monday.
“William Nordhaus and Paul Romer have designed methods that address some of our time’s most fundamental and pressing issues: long-term sustainable growth in the global economy and the welfare of the world’s population,” said The Royal Swedish Academy of Sciences.
Nordhaus’ research shows how economic activity interacts with basic chemistry and physics to produce climate change.Nordhaus was the first person to create a quantitative model that describes the global interplay between the economy and the climate.
His model is now widespread and is used to examine the consequences of climate policy interventions, for example carbon taxes.
Romer’s research shows how the accumulation of ideas sustains long-term economic growth. He demonstrated how economic forces govern the willingness of firms to produce new ideas and innovations.