William Nordhaus and Paul Romer awarded as 2018 Nobel Prize for Economics

US duo William D. Nordhaus and Paul M. Romer have won the 2018 Nobel Memorial Prize in Economic Sciences for research “about innovation, climate and economic growth”. Laureate Romer was honoured for his work on the endogenous growth theory, which has generated vast amounts of new research into the regulations and policies that encourage new ideas and long-term prosperity. While Laureate Nordhaus was specifically honoured for “integrating climate change into long-run macroeconomic analysis”. His research shows that the most efficient remedy for problems caused by greenhouse gas emissions is a global scheme of carbon taxes uniformly imposed on all countries. Nordhaus was the first person to create a quantitative model that describes the global interplay between the economy and the climate. His model is now widespread and is used to examine the consequences of climate policy interventions, for example carbon taxes. & The pair will share the 9 million Swedish kronor (S$1.3 million) prize.

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