Nobel prize in economics announced in Sweden

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

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

The contributions of Paul Romer and William Nordhaus are methodological, providing us with fundamental insights into the causes and consequences of technological innovation and climate change.

In the past, Romer says, countries practiced a "complacent optimism" toward new ideas, from the cotton gin to assembly-line manufacturing to driverless vehicles.

"Humans are capable of awesome accomplishments if we set our minds to it", Romer added. There are other limitations to DICE, which Nordhaus admits himself. But to some longtime followers of the Nobel committee, the decision to collectively honour their research seemed a logical one.

"It's an ingenious pairing", David Warsh, author of the 2007 book "Knowledge and the Wealth of Nations" told the Associated Press.

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

Now, let's get on to the point: for basically the last decade, I've been specifically waiting for Paul Romer to finally win this prize and each year I've been disappointed when someone else did.

Previous alarms about global warming met with resistance from Congress and the White House. The social cost of carbon should be spread fairly.

Nordhaus' work has led him to conclude that the best way to reduce greenhouse gas emissions and mitigate their effects is a globally enforced system of carbon taxes - a course of action is recommended in the IPCC's report.

The winners William Nordhaus and Paul Romer were awarded the Nobel Prize for Economics for "for integrating climate change into long-run macroeconomic analysis" and "for integrating technological innovations into long-run macroeconomic analysis" respectively.

Many economists have since endorsed the idea of taxing carbon.

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

At a separate news conference at Yale, Nordhaus suggested that there was "pretty widespread acceptance" of climate change science outside the United States, and he expressed optimism that the United States would come around. "It could be good for the world if this became widely adopted", Romer said, also adding, it "should be part of the policy of the government to give individuals some control over the data that the private firms collect and some control over how that data is used".

Inspired by the acceleration in economic activity after the Industrial Revolution, Romer sought to explain how technological advances in the eighties drove economic growth.

Romer has studied the way innovation creates profit increase.

Government policies, he found, are vital. The model doesn't include climate tipping points, which have the capacity to be devastating, and it looks at keeping the climate below 3°C above pre-industrial levels, which we're already in line to hit. He earned a bachelor's degree and a doctorate in economics from the University of Chicago. Other economists followed this line of thinking (Robert Barro, Daron Acemoglu, Philippe Aghion-all prize candidates for a few years now), and the Journal of Economic Growth that covers these topics is now one of the most prestigious and most cited in economics. Last year's prize went to American Richard Thaler for studying how human irrationality affects economic theory.

The peace prize, which was announced in Oslo on October 5, was awarded to Denis Mukwege, a gynecologist from the Democratic Republic of Congo, and Nadia Murad, an activist and victim of war crimes.

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