American economists William Nordhaus and Paul Romer were jointly awarded 2018 Nobel Prize in Economics Sciences for integrating climate change and technological innovation into macroeconomic analysis. Their findings have significantly broadened scope of economic analysis by constructing models that explain how market economy interacts with nature and knowledge.
William Nordhaus :
He is professor at Yale University. He was first person to create economic model that describes global interplay between economy and the climate in the 1990s. This model had showed that the most efficient remedy for problems caused by greenhouse gases is a global scheme of universally imposed carbon taxes.
Paul Romer :
He is professor at New York University’s Stern School of Business. He has showed that how economic forces govern willingness of firms to produce new ideas and innovations. This had laid foundations for new model for development, known as endogenous growth theory.
Nobel Prize in Economic Sciences is officially called Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. It was not part of original group of awards (Chemistry, Literature, Peace, Physics, and Physiology or Medicine) set out in dynamite tycoon Alfred Nobel’s 1895 will. It was instituted in 1968 by Sveriges Riksbank (Sweden’s central bank).