William Nordhaus, Paul Romer awarded Nobel Economics Prize

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

American duo William Nordhaus and Paul Romer awarded to 2018 Nobel Prize for Economics

The Nobel committee said Nordhaus was the first person to create a "integrated assessment model", or a quantitative model, that describes the interaction between the economy and the climate.

"It's an ingenious pairing", said David Warsh, author of the 2007 book Knowledge and the Wealth of Nations about the award.

The UN Intergovernmental Panel on Climate Change (IPCC) just released a special report on the predicted impacts of global warming of 1.5 °C above pre-industrial levels.

"Humans are capable of wonderful accomplishments if we set our minds to it", Romer added. Nordhaus concluded that the most efficient approach was to deploy carbon taxes, applied uniformly to different countries. A number of people are trying to find innovative options that can help reduce emissions and make environmental protection easier for everyone.

William D Nordhaus and Paul M Romer were today awarded the 2018 Sveriges Riksbank Prize in Economic Sciences, informally called the Nobel Prize in Economics. "Romer has been writing about the means at your disposal" to attack such a technological challenge.

Romer said at the press conference that he thought Nobel Prizes would be announced next Monday, so when he received two calls early in the morning, he didn't answer them because he often receives spam calls - he then realized that the calls were from Sweden and he had won the Nobel Prize.

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The academy said that the contributions of this year's laureates "are methodological, providing us with fundamental insights into the causes and consequences of technological innovation and climate change". The official statement by the jury stated that the joint prize highlights the importance of worldwide cooperation to achieve a long-term economic growth. It was not part of the original group of five awards set out in Swedish industrialist Alfred Nobel's 1895 will.

"His work suggests a key role for the government in protecting the property rights of innovators and subsidizing research". Examples include subsidies for research and development, and patent policies that strike a balance between letting inventors profit from their breakthroughs and allowing others to put those innovations to work. He earned a bachelor's degree and a doctorate in economics from the University of Chicago.

Through endogenous growth theory, people can be given more incentives to "rearrange" the world, and discover new ideas, instead of toiling away in factories or on computers, repeating the same motions over and over again. Last year's prize went to American Richard Thaler for studying how human irrationality affects economic theory.

This year four other Nobel prizes were handed out - Arthur Ashkin, Gerard Mourou and Donna Strickland for Physics, Frances Arnold, George Smith and Gregory Winter for Chemistry, James P Allison and Tasuku Honjo for Medicine and Denis Mukwege and Nadia Murad for Peace.

William Nordhaus, one of two men to receive the Nobel prize in economics on Monday, grew up in Albuquerque and travels yearly to New Mexico for summer visits with family.

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