A Nobel Economics Prize for the Long Run

10 October, 2018, 16:25 | Author: Eric Barnett
  • Why Nobel Prize winner Paul Romer likes India's controversial Aadhaar database

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 looks at ways to integrate the possible impacts of climate change into economic models.

Carbon taxes are fees imposed on companies that burn carbon-based fuels such as coal and oil. Its supporters encourage governments and the private sector to foster innovation and incentives for increased creativity.

Paul Romer's research, on the other hand, shows "how the accumulation of ideas sustains long-term economic growth". The economics prize wraps up the 2018 Nobel awards season.

He shares the prize with Yale University professor William Nordhaus, who was recognized for his own work on the critical importance of climate change and how economics can provide a solution.

According to the Associated Press, Romer ignored two telephone calls, thinking they were spam calls, before the Swedish Royal Academy of Sciences was able to get through to him. "I hope the prize today could help everyone see that humans are capable of awesome accomplishments".

As economists, Nordhaus and Romer have worked independently of each other.

They are honoured in December, on the anniversary of Alfred Nobel's death.

He said "Nordhaus has been concerned all along with repairing the damage" to the environment.


Two U.S. academics focusing on the subject of sustainable growth were honored on Monday with the 2018 Nobel Prize in Economics.

Previous alarms about global warming met with resistance from Congress and the White House. Gradually, he developed models to guide policymakers in balancing the economic costs and the societal benefits of combating carbon emissions.

Nordhaus of Yale University and Paul M. Romer of the Stern School of Business in NY were awarded the 2018 Nobel Prize in Economics for their work on combining key questions surrounding climate change and innovation with economic growth.

Many economists have since endorsed the taxing of carbon.

In July, the GOP-controlled House voted for a resolution rejecting carbon taxes as detrimental to the US economy.

Hours before the award, the United Nations panel on climate changed warned of the risks of more frequent heatwaves, floods and drought in some regions as well as the loss of species without a radical rethink in how societies operate.

Just like Romer, Gates believes that we can solve the most pressing problems of the world with new ideas, if we move quickly.

His 1996 study of the economic history of lighting back to Babylonian times found that the measurement of long-term economic growth has been significantly underestimated.

Governments have the power to promote or discourage innovation through policy. While capital and labour are "rival goods", in the sense that their use in the generation of value at one place precludes their use for generation of value elsewhere, while ideas are "non-rival goods", the same idea can produce value at multiple locations, unless restrictions are put on their access. "That sense of belonging means you can take satisfaction out of a career whether or not you happen to be the one who gets a prize for it". He earned a bachelor's degree and a doctorate in economics from the University of Chicago.

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