By Prarthana Mitra
The 2018 Nobel Memorial Prize in Economic Science was awarded on Monday to American economists William D. Nordhaus and Paul M. Romer for introducing environmental change and technological advancement as long-term determinants of economic growth.
The 50th Nobel Prize in Economics was shared between Romer and Nordhaus, both shortlisted by the Nobel Committee for a long time. The official statement by the jury stated that the joint prize highlights the importance of international cooperation to achieve a long-term economic growth. The message is that its needed for countries to cooperate globally to solve some of these big questions, said Goran K. Hansson, secretary general of the Royal Swedish Academy of Sciences.
Why is their work significant?
Besides pioneering the economic analysis of climate change, Nordhaus, a professor of economics at Yale University, has been a life-long advocate for carbon taxation to reduce emissions. He was awarded the most coveted award in his field, on the same day the United Nations releaseda climate report, citing Nordhaus’ work. It warned the panel of dire consequences from climate changeand urged governments to respond to global warning with greater urgency.
While Nordhaus was cited for his work on environmental and climatic change, Romer’s work focused on the economic impact of technological changes and the role of ideas in fostering economic growth.
After the announcement, Romer, a professor of economics at New York University, said that he shared Nordhaus’s optimism that public policy can be improved. One problem today is that people think protecting the environment will be so costly and so hard that they want to ignore the problem and pretend it doesnt exist, he said. Humans are capable of amazing accomplishments if we set our minds to it.”
Inspired by the acceleration in economic activity after the Industrial Revolution, Romer sought to explain how technological advances in the eighties drove economic growth. He urged policymakers to foster technological innovation by investing in research and development, patenting intellectual property for public use.
Strongly against dressing up political beliefs in difficult science and math, Romer became the chief economist of the World Bank in 2016, before resigning 15 months later convinced that the banks positive evaluation of Chiles economic policieswaspolitically influenced.
The recipient of theEconomics award last year was Richard H. Thalerfor his pioneering work in establishing that human behaviour is irrational and in defiance of economic theory.
The complete list of Nobel laureates this year
James P. Allison and Tasuku Honjo sharedthe Nobel Prize in Medicine2018 for a discovering a way to harness the inbuilt immune system to combat cancer cells. Arthur Ashkin, Grard Mourou and Donna Strickland wonthe Nobel Prize in Physicsfor developing tools made of light beams. Strickland became the third woman in history to win the physics prize. TheNobel Prize in Chemistrywent to Frances H. Arnold, George P. Smith and Gregory P. Winter for tapping the power of evolutionary biology to solve chemical problems.
Congolese gynaecologist Denis Mukwege and Social Justice Warrior Nadia Murad received the prestigiousNobel Peace Prize “for their efforts to end the use of sexual violence as a weapon of war.”
Prarthana Mitra is a staff writer at Qrius
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