Nobel Economic Prize Awarded to 2 Americans

Per Stroemberg Goeran K Hansson and Per Krusell announce the laureates of the Nobel Prize in Economics during a press conference at The Royal Swedish Academy of Sciences in Stockholm

Americans William D Nordhaus and Paul M Romer win 2018 Nobel Prize in Economics

The Royal Swedish Academy of Sciences awarded the $1 million prize Monday to William Nordhaus of Yale University and to Paul Romer of New York University.

Nordhaus, a professor of economics at Yale University, was the first person to create a quantitative model that described the interplay between the economy and the climate, the Swedish academy said.

This is why "societal questions are reflected in the prize", including the issue of climate change, which is 'very important right now, ' he said. He said he had been taken by surprise by the award, but offered a positive message. In fact, thanks to Warsh's book about Romer, and its section on Nordhaus - as well as a few other mentions - that made me go out and pick up a copy of The Economics of New Goods, which is a collection by the National Bureau of Economic Research (NBER) of some of the absolute best papers on economics and innovation.

Professor Romer, of New York University's Stern School of Business, has shown how economic forces govern the willingness of firms to produce new ideas and innovations.

Whether it's improving communication systems, developing new drugs, or coming up with potentially planet-saving environmental proposals, Romer argues that we can solve the world's most pressing problems with increasing speed using the principles of endogenous growth theory.

He later revealed how he got two phone calls before 1000 GMT (6 p.m.in Manila) but didn't answer, thinking they would be telemarketing. He initially missed the early morning call from Sweden telling him he won before calling back, when he was asked if would accept the prize.

"What's a little bit troubling, even though I remain very optimistic about technological possibilities, is that it seems as though we're starting to lose our commitment to the facts", he told a news conference in NY.

Americans William D Nordhaus and Paul M Romer win 2018 Nobel Prize in Economics

After all, Nordhaus works on how to include the external costs of climate change into macro-economic models while Romer's work addresses the rules of technological change.

Besides pioneering the economic analysis of climate change, Nordhaus, a professor of economics at Yale University, has been a life-long advocate for carbon taxation to reduce emissions. Carbon dioxide, which is emitted when fossil fuels are burned, is a heat-trapping "greenhouse gas" blamed for global warming, and a tax would make polluters pay for the costs imposed on society.

Countries refusing to take part in the scheme could be subjected to customs tariffs.

Referring to the Trump administration's resistance, Nordhaus said: "I think we just need to get through what is a hard period".

Romer's work shows how knowledge can serve as a driver of long-term economic growth. Romer's theory prompted new research into policies that encourage ideas and progress, according to a Nobel press release. He was chief economist at the World Bank from 2016 to 2018, and is credited with the quote "A crisis is a awful thing to waste".

Alongside the winners William Nordhaus and Paul Romer, there have been forty nine Nobel prizes for economics and they have been awarded to a total of seventy five laureates. There have been 49 Economic Sciences prizes, awarded to 75 laureates.

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