The Royal Swedish Academy of Sciences has made a decision to award the Sveriges Riksbank Prize in Economic Sciences to William D Nordhaus and Paul M Romer who have designed methods for addressing the world's most basic and pressing question of creating long-term sustained and sustainable economic growth. "They want to deny it exists", Romer said. The metric is increasingly used when implementing climate change policies. Carbon dioxide, which is emitted when fossil fuels are burned, is a heat-trapping "greenhouse gas" blamed for global warming, and a tax would make polluters pay for the costs imposed on society.
"Paul Romer and Bill Nordhaus are brilliant economists who have both dramatically deepened our understanding of sustainable growth patterns and their technological and policy underpinnings", said NYU economics professor Michael Spence, who won the same prize in 2001.
"It's an ingenious pairing", said David Warsh, author of the 2007 book Knowledge and the Wealth of Nations about the award.
The 62-year-old Romer, who this year stepped down from his post as chief economist at the World Bank after a rocky term, has argued that policy makers should stop trying to fine-tune the business cycle and instead promote new technology. But adopting the regulatory frameworks on a global scale has proven problematic, and the world's political leaders are failing to meet it, the head of the United Nations said last month.
Nordhaus, often considered the father of climate-change economics, won "for integrating climate change into long-run macroeconomic analysis".
Nordhaus, at the University of Yale in New Haven, Connecticut, is the founding father of the study of climate change economics.
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Yet innovation must be managed and promoted (such as in the awarding of prizes like the Nobels).
Revealing the reason for its choice, the academy said it was because the two are icons when it comes to "integrating technological innovations into long-run macroeconomic analysis".
Strongly against dressing up political beliefs in hard science and math, Romer became the chief economist of the World Bank in 2016, before resigning 15 months later convinced that the bank's positive evaluation of Chile's economic policies was politically influenced. Under his guidance, the Dynamic Integrated and Regional Integrated climate models (known as DICE and RICE) were developed to take climate change explicitly into account when analyzing global changes such as the Kyoto protocol.
The recipient of the Economics award previous year was Richard H. Thaler for his pioneering work in establishing that human behaviour is irrational and in defiance of economic theory.
The prize is to be announced on Monday at 11:45 am (0315 IST) in Stockholm, wrapping up the 2018 awards season in which the most highly-anticipated prize, that for peace, on Friday went to Yazidi women's campaigner Nadia Murad, a former Islamic State sex slave, and Congolese doctor Denis Mukwege, who helps women recover from the violence and trauma of sexual abuse and rape in war.