Published: Tue, October 09, 2018
Economy | By

UChicago Alum, Former Professor Wins Nobel Prize in Economics

UChicago Alum, Former Professor Wins Nobel Prize in Economics

This year's winners of the Nobel Prize for Economics are William Nordhaus and Paul Romer, recognized for taking macroeconomics to a global scale to tackle some of the world's biggest problems, the prize committee said. The social cost of carbon should be spread fairly.

"Many people think that dealing with protecting the environment will be so costly and so hard that they just want to ignore the problem", Romer said. There are other limitations to DICE, which Nordhaus admits himself.

Unlike Romer and Nordhaus, the panel of scientists who produced the United Nations report expressed little hope that the world will rise to the challenge. The Intergovernmental Panel on Climate Change, made up of thousands of scientists, finds the earth's temperature has risen 1 degree Celsius - or 1.8 degrees Fahrenheit - since pre-industrial times.

"Humans are capable of fantastic accomplishments if we set our minds to it", Romer added. His "endogenous growth theory", developed in the 1990s, opened new avenues of research on how policies and regulations can prompt new ideas and economic innovation.

He said "Nordhaus has been concerned all along with repairing the damage" to the environment. While both great minds have always been expected to be recognized by the Nobel committee, the award to both at once came as a surprise to many.

Paul Roemer, of New York University's Stern School of Business in New York City, concluded that technological growth was behind long-term economic growth.

Many economists have since endorsed the taxing of carbon.

"Paul's first job was at Rochester, where he did pathbreaking work to figure out how firms' decisions to invest in research and development lead to economic growth". His vision was to model new ideas as goods and services.

The Nobel Economics Prize was not part of the original line-up of awards as envisaged by Alfred Nobel and is therefore officially known as the Nobel Memorial Prize in Economic Sciences.

Among the "usual suspects" cited frequently for the Nobel are United States economists Paul Romer and Paul Milgrom, and Frenchman Olivier Blanchard, a former International Monetary Fund chief economist.

Nobel prizes were initially awarded in the fields of physics, chemistry, medicine, literature and peace.

Last year's prize went to one of the founders of behavioral economics and finance, Richard H. Thaler of Chicago University, for his work studying human bias at a time when other economists still viewed people as rational actors.

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