New Delhi: William D Nordhaus and Paul M Romer bagged the Nobel Prize in Economic Science for addressing the need to create long-term sustainable economic growth, broadening the scope of economic analysis. They have constructed models that explain how the market economy interacts with nature and knowledge.
Romer demonstrated how knowledge can function as a driver of long-term economic growth. Previous macroeconomic research lacked the details about economic decisions determining the creation of new technologies. Paul Romer solved this problem by demonstrating how economic forces govern the willingness of firms to produce new ideas.
Romer's solution, initially published in 1990, laid the foundation of contemporary endogenous growth theory. The theory explains how ideas are different to other goods and require specific conditions to thrive in a market.
Nordhaus' findings deal with interactions between society and nature. He had become increasingly worried about the combustion of fossil fuel resulting in a warmer climate. In the mid-1990s, he became the first person to create an integrated assessment model, a quantitative model that describes the global interplay between the economy and the climate. His model integrates theories and empirical results from physics, chemistry and economics. Nordhaus' model is used to examine the consequences of climate policy interventions, for example, carbon taxes.
Nordhaus was born in Albuquerque, New Mexico. He completed his undergraduate work at Yale University in 1963 and received his PhD in Economics in 1967 from the Massachusetts Institute of Technology, Cambridge. He is a member of the National Academy of Sciences and a Fellow of the American Academy of Arts and Sciences. He is on the research staff of the National Bureau of Economic Research and has been a member and senior advisor of the Brookings Panel on Economic Activity, Washington, D.C. since 1972. Professor Nordhaus is current or past editor of several scientific journals and has served on the Executive Committees of the American Economic Association and the Eastern Economic Association. In 2004, he was awarded the prize of "Distinguished Fellow" by the American Economic Association.
He has served on several committees of the National Academy of Sciences including the Committee on Nuclear and Alternative Energy Systems, the Panel on Policy Implications of Greenhouse Warming and the Committee on National Statistics. Recently, he directed the Yale Project on Non-Market Accounting, backed by the Glaser Foundation. He has also authored several books.
Recently, he has undertaken the "G-Econ project," which provides the first comprehensive measures of economic activity at a geophysical scale.
While, Paul Romer, an economist and policy entrepreneur, is the founding director of the NYU Stern Urbanization Project, which conducts applied research on ways in which policymakers can use the growth to create economic opportunity and undertake systemic social reform in cities. He is also a University Professor at the New York University and Director of NYU's Marron Institute of Urban Management.
Before coming to NYU, Professor Romer taught at Stanford University's Graduate School of Business. While there, he took an entrepreneurial detour to start Aplia, an education technology company dedicated to increasing student effort and classroom engagement. To date, students have submitted more than one billion answers to homework problems on the Aplia website.
Professor Romer serves on the board of trustees for the Carnegie Endowment for the Advancement of Teaching. He is also a member of the board of directors for Community Solutions, a not-for-profit dedicated to strengthening communities and ending homelessness.