The Royal Swedish Academy of Sciences has awarded the Sveriges Riksbank Prize in Economic Sciences to William D Nordhaus and Paul M Romer, both from the US.
William D Nordhaus, from Yale University, New Haven, USA has been awarded the Sveriges Riksbank Prize in Economic Sciences “for integrating climate change into long-run macroeconomic analysis.”
Paul M Romer, from NYU Stern School of Business, New York, USA has been awarded the Sveriges Riksbank Prize in Economic Sciences “for integrating technological innovations into long-run macroeconomic analysis.”
The award was presented by Göran K. Hansson, Secretary General of The Royal Swedish Academy of Sciences.
Laureate William Nordhaus’ research shows how economic activity interacts with basic chemistry and physics to produce climate change.
Nordhaus was the first person to create a quantitative model that describes the global interplay between the economy and the climate. His model is now widespread and is used to examine the consequences of climate policy interventions, for example carbon taxes.
Nordhaus’ research shows that the most efficient remedy for problems caused by greenhouse gas emissions is a global scheme of carbon taxes uniformly imposed on all countries.
Laureate Paul Romer’s research shows how the accumulation of ideas sustains long-term economic growth. He demonstrated how economic forces govern the willingness of firms to produce new ideas and innovations.
Romer’s research laid the foundation of what is now called endogenous growth theory. The theory has generated vast amounts of new research into the regulations and policies that encourage new ideas and long-term prosperity.