Nobel Prizes for Paul Romer and William Nordhaus

The 2018 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (aka Nobel Prize in Economics) has been awarded to William Nordhaus of Yale "for integrating climate change into long-run macroeconomic analysis" and Paul Romer of NYU "for integrating technological innovations into long-run macroeconomic analysis."

Marginal Revolution has excellent coverage as always, on Nordhaus and on Romer. Romer's work on endogenous growth theory hasn't had much influence on my teaching as I don't teach macroeconomics or growth, but here is an excellent video from MRU that summarises many of the key contributions:

As you might expect, Nordhaus' work on the economics of climate change is picked up in my ECONS102 class in the topic on externalities and common resources. Here is my review of his book The Climate Casino - it's good that I finally read a laureate's most recent book before they received the award for once! Nordhaus has also contributed to our understanding of the economics of intellectual property rights, which Marginal Revolution didn't mention, but which I have talked about briefly here and here. His approach, in terms of the trade-off between having weaker (or shorter) intellectual property rights, which would lead to under-investment in intellectual property development, or having stronger (or longer) intellectual property rights, which would lead to under-consumption of intellectual property, is what I follow in teaching that topic in ECONS102.

This was a very well deserved (and overdue) prize for both men. However, I was a little surprised that they shared the prize together (in the Economics Discussion Group poll, both this year and last year, I picked Romer and Robert Barro to win). Nonetheless, an excellent choice.