William Nordhaus and Paul Romer: Causes and consequences of economic growth

Abstract

The Nobel Prize in Economic Sciences for 2018 was awarded to two American scientists - William Nordhaus and Paul Romer - for integrating climate change, i.e. technological innovation into long-term macroeconomic analysis. Since the 1970s, Nordhaus has been developing economic approaches to global warming, including integrated economic and scientific models designed to identify an effective way to tackle climate change. In his research, Paul Romer deals with how the accumulation of ideas enables sustainable long-term economic growth and explains how economic decisions and market conditions influence the creation of new technologies. They point out the imperfections of the market and advocate for more pronounced state intervention, calling on policy makers to introduce appropriate economic measures, in which they see the right path towards better results, global progress and prosperity.

Keywords

• William Nordhaus
• Paul Romer
• Nobel Prize
• economics
• economic growth
• climate change
• technological innovation
• integrated assessment models
• endogenous growth theory