William D. Nordhaus of Yale University and Paul M. Romer of New York University’s Stern School of Business have been awarded the 2018 Nobel Prize in Economics for including long-term thinking on climate issues and technological innovation in economic research.
As Bloomberg reports, the two Americans “have designed methods for addressing some of our time’s most basic and pressing questions about how we create long-term sustained and sustainable economic growth,” the Royal Swedish Academy said in announcing the awards this morning.
Nordhaus, 77, began working on environmental issues in the early 1970s and has been trying to measure the economic costs of rising temperatures ever since. In the 1990s, he became the first person to create a model that calculates the interplay between the economy and the climate.
The 62-year-old Romer, who this year stepped down from his post as chief economist at the World Bank after a rocky term, has argued that policymakers should stop trying to fine-tune the business cycle and instead promote new technology.
His work published in 1990 has served as the foundation for what’s called “endogenous growth theory,” a rich area of research into the regulations and policies that encourage new ideas and long-term prosperity.
