The 2018 Nobel prize for economics goes to Paul Romer and William Nordhaus

 

William Nordhaus (left) and  Paul Romer (right)

 

This year's Nobel for Economic Sciences goes to two economist who have made an effort to understand the two most complex topics in economics, how they influence economy, and model them - innovation and climate change. Innovation is important for economic growth and is a product of  human endeavor, but how to understand and incorporate it as component in an economic model, so that remedies can be prescribed to aid it and hence economic growth - this was done by Paul Romer and doing so he elucidated on the importance of government intervention (public policy) in fostering it. Climate Change (as a model) and how the economic growth interact in complex manner was modeled by William Nordhaus, he too emphasized on the importance of government intervention (public policy) in tackling rise in climate change, he proposed the famous market solution carbon tax for tackling green house gases.

The commonality underpinning two economists who were awarded Noble in Economics Sciences 2018 lies in the fact that they both modeled the two complex ideas which were earlier treated as black box and both have prescribed government intervention (public policy) as a necessary tool.

For further reading:

2018 Nobel in Economics Is Awarded to William Nordhaus and Paul Romer (NYT)https://www.nytimes.com/2018/10/08/business/economic-science-nobel-prize.html

The Nobel prize for economics is awarded for work on the climate and economic growth (The Economist)
https://www.economist.com/finance-and-economics/2018/10/08/the-nobel-prize-for-economics-is-awarded-for-work-on-the-climate-and-economic-growth