2018 Nobel Prize for Economics Went to Champions of Economic Growth and Climate Change

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t the Nobel prize for economics was announced on October 2018. The million dollar award went to William Nordhaus of Yale University and Paul Romer of New York University.

Nordhaus is called the father of climate change economics and believes that nations should raise the prices of fossil fuels to protect the climate. Romer, a growth economist, received the prize “for integrating technological innovations into long-run macroeconomic analysis”

Here is a brief history of the Nobel Prize

Alfred Nobel instructed in his will that there must be five official Nobel prices: physics and chemistry, literature, medicines, and peace. But there is a special award for economics.

The Alfred Nobel Museum in the north side of the square Stortorget in Gamla Stan, the old town in central Stockholm, Sweden. Alfred Nobel did not include an award for economics.

In 1968, Sweden’s Central Bank made a donation to the Nobel foundation, and from that, a prize for economics was formed, but not everyone approved.

Nobel’s great-great Nephew Peter Nobel once said,

“It is awarded as if it were a Nobel Prize. But it’s a PR coup by economists to improve their reputation

One of the most known Laureates John Nash, an American economist whose story was told in a film “A Beautiful Mind.” The film featured his struggle with paranoia schizophrenia. It recounts how he came up with the Nash Equilibrium, an important concept in game theory for which he won the prize in 1994.

John Forbes Nash Jr. (June 13, 1928 – May 23, 2015) was an American mathematician who made fundamental contributions to game theory, differential geometry, and the study of partial differential equations. He won the Nobel Prize for Economics in 1994. His ideas have been used to analyze many things, including the arms race and traffic flow.

Nash’s game’s theory states that a player in a game has achieved the Nash equilibrium when they make the choice that leaves them better off no matter what their opponents decide to do

The economics award has always gone to economists. For example, Daniel Kahneman, an American Professor of Psychology, discovered that people do not always act in what is called ‘rational and self-interest.’ For instance, people will push harder to save $10 on a small purchase like a $50 bicycle than they would want to save the same amount on a larger purchase like a car.

Daniel Kahneman, PhD, was awarded the Nobel Memorial Prize in Economic Sciences for his groundbreaking work in applying psychological insights to economic theory, particularly in the areas of judgment and decision-making under uncertainty.

Of the 79 people that have been awarded the economics prize, there has only been one female winner, Elinor Ostrom. Her work was recognized for informing how communities can better manage common resources than governments.

Elinor Ostrom is the first woman to win the Economics Prize. She shared the Nobel Memorial Prize in Economic Sciences with Oliver E. Williamson for her “analysis of economic governance, especially the commons”.

 

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