American economists William D. Nordhaus and Paul M. Romer have been awarded for integrating climate change and technological innovations, respectively, "into long-term macroeconomic analysis."
The Royal Academy of Sciences of Sweden has decided to award the Bank of Sweden Award in Economic Sciences in memory of Alfred Nobel 2018 to economists William D. Nordhaus and Paul M. Romer .
US economists have been awarded for integrating climate change and technological innovations, respectively, "into long-term macroeconomic analysis."
Nordhaus and Romer "have designed methods that address some of the most fundamental and urgent issues of our time: sustainable long-term growth in the global economy and the well-being of the world's population, " the organizers of the award say in their official account. Twitter
Nordhaus's research demonstrates "how economic activity interacts with chemistry and basic physics to produce climate change". The quantitative model developed by the economist to describe this interaction is used to study the consequences of climate policy interventions, for example, taxes on carbon.
Nordhaus's work shows that the most effective solution to the problems caused by greenhouse gas emissions lies in a "global tax scheme on coal implemented uniformly in all countries." The following diagram shows four climate policies according to their simulations.
In turn, Paul Romer's research "shows how the accumulation of ideas sustains long-term economic growth." The economist "has shown how economic forces govern the willingness of companies to produce new ideas and innovations." Romer laid the foundations of the theory of endogenous growth, which has generated a large number of investigations of "regulations and policies that foster new ideas and long-term prosperity."