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Nobel prize in economics announced in Sweden

09 October 2018
Nobel prize in economics announced in Sweden

American duo William Nordhaus and Paul Romer have been awarded the 2018 Nobel Prize in Economics for their efforts in this direction.

William D Nordhaus and Paul M Romer have won the 2018 Sveriges Riksbank Prize in Economic Sciences, the Royal Swedish Academy of Sciences announced on Monday.

Romer, an economics professor at the New York University Stern School of Business, said during a news conference he was not expecting the prize - so much so that he did not answer the first two calls from the Nobel committee because he thought they were spam.

Nordhaus's 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 is best known outside the arcane universe of professional economists for his work on climate change, producing computable models that permit forecasting how different kinds of growth will produce different kinds of change to the climate that will redound on the economy with differential impact.

His family has Jewish roots, with origins in a German-Jewish immigrant wave in the early 19th century, according to his profile on the website of the scientific journal Proceedings of the National Academy of Sciences of the United States of America.

Romer has researched how innovation by companies and governments drives prosperity and studied how to go about encouraging it. His research has led to the formation of a new theory dubbed as endogenous growth theory.

"One of the problems with the current situation is that many people think that dealing with protecting the environment will be so costly and so hard that they will ignore the problem and deny it exists", he said.

Romer's career has also taken him outside the academic world.

"I hope the prize will help people see humans are capable of fantastic accomplishments when we try to do something".

Though the prize is not technically considered a Nobel Prize, as it was not established in the will of Alfred Nobel, it is regarded to be equivalent to those prizes (Chemistry, Literature, Peace, Physics, and Medicine) in the field of economics.

Many economists have since endorsed the concept of taxing carbon and using this financial lever to influence societal behaviour. But adopting the regulatory frameworks on a global scale has been a complex challenge, and the world's political leaders are failing to meet it, the head of the United Nations said last month. David Warsh, a blogger who follows economic research and has written a book on Romer's work, said he thought it was no coincidence that the Nobel committee made a decision to honor Nordhaus and Romer at a time of escalating alarm over climate change. He was awarded the prize in economic sciences in 2007 when he was 90 years old.