Paul M Romer and William D Nordhaus won Nobel Prize in Economics in 2018 for their

work in “Climate, innovation and economic growth”. Paul Romer won the prestigious
prize for the following statement – “for integrating technological innovation into long
run economic analysis”. Dr. Romer stressed upon the endogenous growth theory. The
theory is both conceptual and practical, as it explains how ideas are different to other
goods and require specification conditions to thrive in the market. Dr. Nordhaus first
formulated the concept of “an integrated assessment model, i.e. a quantitative model
that describes the global interplay between the economy and the climate.”

Both of them clearly answered the question about how sustained and sustainable global
economic growth can be achieved. Their findings have significantly broadened the scope
of economic analysis by constructing models that explain how the market economy
interacts with the nature. Nordhaus has shown that the most efficient remedy for
problems caused by greenhouse gases is a global scheme of universally imposed carbon
taxes. Both of them won 9 million Swedish Crowns (860714.78 pounds) for the prize
established by Alfred Noble in 1968.