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Nobel Prize in Economics awarded for the macroeconomics of climate change and innovation

William Nordhaus for the “integration of climate change into a long-term macroeconomic analysis” and Paul Romer for the “integration of technological innovations into a long-term macroeconomic analysis.” You can follow the live broadcast of the announcement of the laureates  on the official website of the Nobel Prize.

As noted in the report of the award committee, William Nordhaus, a professor at Yale University, showed that the most effective solution to the problem of climate change caused by human activity is the global system of carbon taxes on greenhouse gas emissions for all countries. In the mid-1990s, Nordhaus created the first quantitative integrated evaluation model DICE, connecting economics and climate. “Nordhaus is called the father of climate change economics, he began to deal with it in the 1970s even before this topic became central for climatologists. Nordhaus is the first to look at climate change as an economic problem and suggested ways to regulate it in terms of carbon prices (fees for greenhouse gas emissions), ”said Igor Makarov, associate professor at the Faculty of World Economy and World Politics, N + 1. ,

Paul Rohmer of New York University showed what economic factors drive the innovation activity of firms. He laid the foundations of the so-called theory of endogenous growth, explaining how ideas differ from products and what requirements they need for development in a market economy. “Romer proposed one of the first models, where in fact for the first time made the cause of [economic] growth endogenous. The reason for the growth in general is knowledge, ideas, maybe technology, investments in technology. This gave an explanation of why well-developed countries continue to grow well, and [there was] a lot of attention to the need to pay attention to technology policy, in particular, to R & D subsidies, ”explained N + 1 NES professor Sergei Izmalkov.

Both Nordhaus and Romer were included in the list of potential prize winners according to the company Clarivate Analytics, which uses the citedness of scientific articles for prediction.

Recall that in 2017, the Nobel Memorial Prize in Economics received an American behavioral economist Richard Thaler. About the works of Thaler can be found in our material “Least rational . ” The awards of 2016 were awarded to Oliver Hart and Bengt Holmström for his contribution to the development of contract theory .
Unlike the Nobel Prizes in Physiology and Medicine, Physics, Chemistry and Literature, and the World Prize, the Prize in Economics was established not by Alfred Nobel himself, but by the Bank of Sweden in 1969. Its size is equal to the size of the “main” awards – this year it is 9 million Swedish crowns.

Earlier this year Nobel laureates in other areas were announced. Prizes in medicine were awarded to James Allison and Tasuku Honjo for advances in cancer therapy by activating the immune response. You can read more about their work in our material “Unleash dogs from the chain” . Arthur Ashkin (Arthur Ashkin) for developing optical tweezers and its application in the field of biology, as well as Gerard Mourou and Donna Strickland (Donna Strickland) for developing a method for generating high-intensity ultrashort optical pulses. How these laser systems work and where they are used can be found in the material “Scalpel and Tweezers”. Chemistry awards will be given to Frances H. Arnold for the directed evolution of enzymes, and also to George P. Smith and Sir Gregory P. Winter for phage display of peptides and antibodies. About their work our material “Game in God . ” The presentation of the Nobel medals will take place on December 10 in Stockholm at the traditional official ceremony.

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