Economics - General

2018 Economics Nobel goes to Nordhaus and Romer

 The Nobel Prize in Economics (formally the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel) was awarded to William Nordhaus and Paul Romer. 

For Romer, the Nobel Prize committee cited his work on endogenous growth theory, that models “how economic decisions and market conditions determine the creation of new technologies. Paul Romer solved this problem by demonstrating how economic forces govern the willingness of firms to produce new ideas and innovations.” In addition to being an academic, Romer also was the chief economist at the World Bank.  He has been a big proponent of “charter cities” as well.  

For Nordhaus, the Nobel committee noted his work on climate change.  Specifically, Nordhaus’ integrated assessment model, described the interaction between the economy and the climate. His model integrates theories and empirical results from physics, chemistry and economics.  Nordhaus was an early proponent of the carbon tax.  He also likes using Python

How are these two individuals linked?

“The message is that it’s needed for countries to cooperate globally to solve some of these big questions,” said Goran K. Hansson, the secretary general of the Royal Swedish Academy of Sciences.

Tyler Cowen writes in Bloomberg to give his own rationale for the pairing:

It might sound weird that the Royal Swedish Academy of Sciences has awarded a dual prize for work on economic growth and on the environment, but in fact it is a brilliant move. Both Nordhaus and Romer are concerned with the total size of the economic pie — growing it as well as sustaining it.

Additional coverage is at the Nobel Prize website, N.Y. Times, Marginal Revolution, EconBrowserReason among many others.


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