Nobel prize in economics given for work on climate change and innovation

William Nordhaus and Paul Romer awarded world accolade

World Bank chief economist Paul Romer.

World Bank chief economist Paul Romer.

 

The Nobel Prize in economics has been awarded to William Nordhaus and Paul Romer for their work on climate change and innovation.

Prof Nordhaus of Yale has won recognition for his work integrating climate change into long-run macroeconomic analysis. He was the first person to create a quantitative model describing the interplay between the economy and climate – which is now used to examine the consequences of policy interventions such as carbon taxes.

Prof Romer, a former chief economist at the World Bank, has been recognised for work that laid the foundations of what is now called endogenous growth theory.

The prize committee said their principal achievements had been to develop the economic tools needed to address the fundamental question of how to ensure sustainable long-run economic growth - with a huge impact on policymaking.

Prof Romer told a press conference that he hoped the prize would help 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.”

- Copyright The Financial Times Limited 2018