US economists share Nobel for work on climate and growth

This year’s Nobel Prize for Economics has been awarded to William Nordhaus and Paul Romer, above, (Photo: Twitter/@NobelPrize) from the US for their work on how climate change and technology have affected the economy.

The two addressed “some of our time’s most… pressing questions” on how to achieve sustainable growth, the Royal Swedish Academy of Sciences said.

Prof Nordhaus of Yale University was the first economist to create a model that described the interplay between economy and climate, the academy said.

His model is based on ideas and empirical results from physics, chemistry and economics. It shows how the economy and climate co-evolve and also examines the consequences of climate policy interventions like carbon taxes.

Prof Romer of New York University’s Stern School of Business showed how economic forces govern the willingness of firms to produce new ideas and innovations.

“Their findings have significantly broadened the scope of economic analysis by constructing models that explain how the market economy interacts with nature and knowledge,” the academy said.

Prof Romer told media that people ignore protecting the environment thinking that it will be costly and hard. But nations can achieve sustained economic growth by protecting the environment, he said.