Two American economists have won this year’s Nobel Prize for economics for their work on climate change and its relationship with global finance.
As reported by the BBC, the accolade was given to William Nordhaus and Paul Romer for their research on global warming and economic growth.
Professor Nordhaus, of Yale University, won recognition for his work merging climate change and long-run macroeconomic analysis. According to the Financial Times, the economist was “the first person to create a quantitative model describing the interplay between the economy and climate.” Such a model is now widely used to study the repercussions of certain policies, such as carbon taxes.
Professor Romer, who’s a former chief economist at the World Bank, has been praised for his research, which became the basis of what is now called endogenous growth theory. This theory claims that endogenous factors, such as investment in human capital, innovation, and knowledge, are bigger contributors to economic growth than any external forces.
“It is entirely possible for humans to produce less carbon… Once we start to try to reduce carbon emissions, we’ll be surprised that it wasn’t as hard as we anticipated,” Professor Romer said at the press conference, upon finding out the news.
He also said he hoped the win helped spread the message that “people are capable of amazing things when we set about doing something.”
“If we make the policy changes required, we can make substantial progress towards protecting the environment — and we can do it without giving up the chance to sustain growth,” the economist added.
Learn more about this year’s Prize in Economic Sciences.— The Nobel Prize (@NobelPrize) October 8, 2018
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The Royal Swedish Academy of Sciences, who’s responsible for awarding Nobel Prizes, said the duo had addressed “some of our time’s most basic and pressing questions” about sustainable growth.
“Their findings have significantly broadened the scope of economic analysis by constructing models that explain how the market economy interacts with nature and knowledge,” the academy said.
Professor Romer stirred controversy earlier this year when he quit his job as the World Bank’s chief economist, only 15 months after accepting the role. His move came amid rumors that the outspoken economist had feuded with his coworkers at the World Bank over a series of issues, “including the organization’s culture and economists’ use of grammar,” the BBC reported.
Romer also claimed that Chile’s rankings in the Doing Business report, a World Bank Group flagship publication, might have been “manipulated for political reasons” under the country’s socialist President Michelle Bachelet.
Romer and Nordhaus will share the prize of 9 million Swedish krona (around $1 million).