United States economists win Nobel prize for work on climate and growth

William Nordhaus and Paul Romer win Nobel Economics Prize

William Nordhaus and Paul Romer win Nobel Economics Prize

Americans William Nordhaus and Paul Romer, pioneers in adapting economic theory to take better account of environmental issues and technological progress, shared the 2018 Nobel Economics Prize on Monday.

Nordhaus, 77, was specifically honoured for "integrating climate change into long-run macroeconomic analysis". His economic approaches to global warming include modeling to determine the efficient path for coping with climate change.

The 62-year-old Romer, who this year stepped down from his post as chief economist at the World Bank, has argued that policy makers should stop trying to fine-tune the business cycle and instead take steps to promote new technology, which would ensure long-term growth.

The academy said that the contributions of this year's laureates "are methodological, providing us with fundamental insights into the causes and consequences of technological innovation and climate change". "I hope the prize today could help everyone see that humans are capable of fantastic accomplishments when we set about trying to do something".

Nordhaus completed his PhD dissertation at MIT under the supervision of Robert M. Solow, himself the 1987 victor of the Nobel Prize in economic sciences. Rather, the Nobel Memorial Prize in Economic Sciences was established by Sweden's central bank and first given out in 1969.

Past year it was awarded to the behavioural economist Richard Thaler, who won for his work on nudge theory, the idea that small "nudges" can influence our economic and social behaviour, and his work around humans being irrational economic actors.

Unlike Romer and Nordhaus, the panel of scientists who produced the United Nations report expressed little hope that the world will rise to the challenge.

The committee also cited Romer's work to develop what is now known as the "endogenous growth theory".

The research of Nordhaus and Romer is united by an interest in what drives economic growth and how to respond when unregulated market forces fail to deliver desired results. This explains how ideas are different from other physical goods and require certain conditions to thrive in a market.

Although the Prize in Economic Sciences is not a Nobel Prize, it is awarded according to the same principles followed when handing out the other Nobel Prizes.

Last year, the honour went to USA economist Richard Thaler, a co-founder of the so-called "nudge" theory.

It went to Yazidi women's campaigner Nadia Murad and Congolese doctor Denis Mukwege for their work in fighting sexual violence in conflicts around the world.

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