Congratulations to William Nordhaus and Paul Romer for winning this year’s Nobel Prize in Economics. (Yes, I know. The Econ Nobel isn’t a Nobel Nobel. But still, it’s nice recognition.)
Nordhaus, a professor at Yale University, is best known for his work on climate economics. Romer, of NYU’s Stern School of Business, is a proponent of a theory that examines how the world can achieve sustainable growth.
“This year’s Laureates have designed methods for addressing some of our time’s most basic and pressing questions about how we create long-term sustained and sustainable economic growth,” the Royal Swedish Academy of Sciences said in a statement.
Nordhaus developed an influential model that examines the consequences of climate policy interventions, including carbon taxes, on the global economy.
His work on climate was recognized the same day that a key UN panel warned that governments around the world must take “rapid, far-reaching and unprecedented changes” to avoid disastrous levels of global warming.
A former chief economist at the World Bank, Romer has shown that economic forces govern the willingness of companies to innovate. The concept is the foundation of what is now called “endogenous growth theory,” which states that new ideas and technology help drive economic activity.
Romer is a particular hero of mine for his criticism of poor economic writing. He threatened to block a development report if it contained too many “and’s.” Romer determined the acceptable “and” level at 2.6%.
Here’s Romer’s TED Talk on charter cities.