William Nordhaus was named for integrating climate change into long term macroeconomic analysis and Paul Romer was awarded for factoring technological innovation into macroeconomics.Credit:TT via AP
Romer,of New York University's Stern School of Business,has shown how economic forces govern the willingness of firms to produce new ideas and innovations,laying the foundations for a new model for development,known as endogenous growth theory.
"Their findings have significantly broadened the scope of economic analysis by constructing models that explain how the market economy interacts with nature and knowledge,"the academy said in a statement.
Worth 9 million Swedish crowns ($1.4 million),the economics prize was established in 1968. It was not part of the original group of five awards set out in Swedish industrialist Alfred Nobel's 1895 will.
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"This year's Laureates do not deliver conclusive answers,but their findings have brought us considerably closer to answering the question of how we can achieve sustained and sustainable global economic growth,"the Academy said.
The Nobel prizes for physiology ormedicine,physics,chemistry andpeace were awarded last week.
This year's awards have stood out for two reasons.