Nordhaus understood how to harness economics in the fight against climate change. Romer demonstrated that technological innovation depends on economic choices. This is why they won the 2018 Nobel Prize in Economics.
William D. Nordhaus and Paul M. Romer have received the 2018 Nobel Prize in Economics for "the integration of climate change and technological innovation into long-term macroeconomic analysis".
William Nordhaus, born in Albuquerque, United States, earned a doctorate from the prestigious Massachusetts Institute of Technology. He developed the first model describing the interaction between the economy and the climate, used to understand how effective economic decisions — such as the introduction of a carbon tax — are in countering global warming.
Paul Romer served as chief economist of the World Bank, before resigning in January after telling the Wall Street Journal that the institution had altered its own competitiveness rankings. He demonstrated how economic forces govern companies' willingness to innovate and develop new technologies. His endogenous growth theory promoted interventions to encourage innovation and thereby drive prosperity and growth over the long term.
The Nobel Prize in Economics was established in 1968 by the Sveriges Riksbank, Sweden's central bank, and is awarded by the Royal Swedish Academy of Sciences, based in Stockholm. The first recipients were the Norwegian Ragnar Frisch and the Dutchman Jan Tinbergen, for the development of dynamic models applicable to the analysis of economic processes. Last year it was awarded to Richard Thaler for his studies in the field of behavioural economics.
