Reasons why Paul Romer, William Nordhaus won 2018 Nobel Prize in economics

Fundamentally, both Romer and Nordhaus have contributed to the economics profession in the same way

William Nordhaus and Paul Romer have been awarded the 2018 Sveriges Riksbank Prize in Economic Sciences (colloquially known as the economics Nobel). Both are macroeconomists dealing with long-run dynamics – big questions of what spurs economic growth, the importance of sustainable growth and how to tackle climate change.

The mainstream economic analysis of the 1970s, when Romer was a graduate student and Nordhaus was an assistant professor, was mostly dedicated to what’s known as general equilibrium analysis: if consumers were to maximise their utilities, and producers were to maximise their profits, what would happen? Both Romer and Nordhaus provided key insights