Two researchers at American universities have been awarded the Nobel Prize for economics.
Yale University’s William Nordhaus was named for integrating climate change into long-term macroeconomic analysis and New York University’s Paul Romer was awarded the prize for factoring technological innovation into macroeconomics.
The pair will share the nine million krona (£770,000) prize.
In awarding the prize in economies, the Swedish Royal Academy of Sciences cited Mr Nordhaus for showing that “the most efficient remedy for problems caused by greenhouse gases is a global scheme of universally imposed carbon taxes”.
A faculty member at Yale University since 1967, Mr Nordhaus’ research has focused on economic growth and natural resources, and the economics of climate change.
His economic approaches to global warming include modelling to determine the efficient path for coping with climate change.
He has also studied wage and price behaviour, health economics, augmented national accounting, the political business cycle, productivity, and the “new economy”.
His current work on what he calls his “G-Econ project” promises to provide the first comprehensive measures of economic activity at a geophysical scale.
The Academy said that the work of Mr Romer showed “economic forces govern the willingness of firms to produce new ideas and innovations”.