MIT alumnus William Nordhaus wins Nobel Prize in economic sciences

William Nordhaus and Paul Romer win Nobel Economics Prize

New York University's Paul Romer won for his work on factoring technological innovation into macroeconomics. At a news conference Monday, Romer said his research has left him optimistic that society can solve even a threat as deeply challenging as the warming of the planet.

In an award that turned the spotlight on the global debate over risks associated with climate change, the Royal Swedish Academy of Sciences said the laureates' work helped answer fundamental questions on how to promote long-term sustainable growth and enhance human welfare.

Together, Nordhaus' and Romer's works have broadened the scope of economic analysis by creating models that explain how the market economy interacts with knowledge and nature.

"His model is now widespread and is used to examine the consequences of climate policy interventions, for example carbon taxes", the statement said.

Nordhaus' research focuses on global carbon taxes to offset greenhouse gas emissions. His integrated assessment model of climate change is now widely used "to simulate how the economy and the climate co-evolve".

Romer, who has studied why some economies grow faster than others, has produced research that shows how governments can advance innovation.




Romer resigned from the World Bank in January 2018 after raising questions about how the institution was ranking countries.

The two economists have not worked together, but the Nobel committee said their achievements are similar because they each built valuable economic models to study global problems.

Both Nordhaus and Romer have been tipped as frontrunners for the Nobel Prize in recent years.

The laureates of the Nobel Prize in Economics, William Nordhaus, left, and Paul Romer, are seen at a press conference at The Royal Swedish Academy of Sciences in Stockholm, on October 8, 2018.

The prize is given to an economist who has made a substantial contribution toward the subject, with an award of 9 million Swedish kroner ($US990,000) split between the pair.

The Nobel prizes for physiology or medicine, physics, chemistry and peace were awarded last week. Last year's economics prize went to alumnus Richard Thaler '74 (PhD), the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the Booth School at the University of Chicago and one-time faculty member at what is now Rochester's Simon Business School.

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