BLOG: Sweden announces winners of 2018 Nobel Prize in Economics

BLOG: Sweden announces winners of 2018 Nobel Prize in Economics
The Nobel Prize in Economics goes to two American economists. Photo: Henrik Montgomery/TT
It's a new dawn, it's a new day, it's another Nobel Prize in Economics. The Local reported live from Stockholm.
  • 2018 Sveriges Riksbank Prize in Economic Sciences is awarded jointly to William D Nordhaus “for integrating climate change into long-run macroeconomic analysis” and Paul M Romer “for integrating technological innovations into long-run macroeconomic analysis”.

13:25 'We need technological innovation'

Therese Lindahl, researcher at the Beijer Institute of Ecological Economics, has just spoken to The Local's Catherine Edwards about the signficance of this year's award. Here's what she had to say:

“What's significant is that they are both methodological breakthroughs. They are frameworks that can be used to study a lot of things; one is about how we can study how technologies can spur economic growth but also what kind of market conditions are needed to spur technological change. That's Romer's contribution, and Nordhaus' contribution is a framework that makes it possible to study how the climate affects the economy and also perhaps how economic activity, and emissions, shapes the carbon cycle and the climate. I would emphasize that they are frameworks for studying some of the most important questions that we have, one of them being how can we make sure that we can have long-term sustainable growth.”

How are they linked?

“They both originate from a growth model that was put forward by (1987 laureate Robert) Solow, they both build on his work and both have a long-run macroeconomic analysis, and they both deal with global issues. They really complement each other nicely. Especially today when the IPCC report was released, that made it really obvious that we need to cut down emissions a lot, that's Nordhaus' work, and also that we need technological innovation because we need to find a way to actually suck up carbon and that technology is not fully functioning yet so we need technological development.”

What are the practical applications?

“With Nordhaus' work, we can think of the IPCC report and all these integrated assessment models that study the economy and the climate, they build on his work. The IPCC report looks at how the climate is affected by carbon emissions and what's needed if we want to go down to 1.5 degrees, and the framework Nordhaus created allows us to see what kind of changes to economic activities and what emissions cuts are needed and how we can get there. It is of course of vital importance in global issues.”

Economist Therese Lindahl. Photo: Catherine Edwards/The Local

That's it from us here at The Local. The new laureates will (hopefully) all come to Stockholm to accept their awards on December 10th. In the meantime, keep reading for the latest news and analysis from Sweden. For unlimited reading (and to support our journalism), sign up HERE.

Thank you for reading!

12:50 Stay tuned for more

We're waiting to speak to one of the experts here today to find out more about this year's laureates and their research, so don't close this blog just yet.

12:10 Maths can be helpful or cause misunderstandings

This year's Economics Prize goes to two Americans (like most Economics Prizes as I explained further down this blog). Nordhaus works at Yale University and Romer at NYU Stern School of Business.

Romer is now talking to journalists via a telephone link. It is very early morning in the US! He stepped down as chief economist of the World Bank earlier this year after criticizing some of his colleagues.

12:05 How the market economy interacts with nature and knowledge

This year's laureates have helped tackle the question of how we should deal with the effects of economic growth on nature, for example climate change. Romer's research has showed how innovation and ideas sustain long-term economic growth. Or in the words of the Royal Swedish Academy of Economic Sciences:

“At its heart, economics deals with the management of scarce resources. Nature dictates the main constraints on economic growth and our knowledge determines how well we deal with these constraints. This year's laureates William Nordhaus and Paul Romer have significantly broadened the scope of economic analysis by constructing models that explain how the market economy interacts with nature and knowledge.” You can read much more about their fascinating research here.

11:55 And the winners are…

This year's prize is awarded jointly to William D Nordhaus and Paul M Romer.

11:35 Just ten minutes to go

The Local's Catherine Edwards is at the Royal Swedish Academy of Sciences where the 2018 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel is due to be announced very soon now.

11:10 What do the laureates get?

Each award is worth nine million kronor in prize money, shared between the winners if there are several. They also receive a medal and a diploma, and get invited to Stockholm on December 10th to accept their award at a rather spendid gala in Stockholm City Hall (or Oslo for the Peace Prize).

While the rest of the world have almost lost interest in the Nobels by then, in Sweden the awards banquet is the dinner against which all other dinners are measured. It is broadcast live on television, it is one of the few times you get to see the royals actually wearing royal tiaras, several column inches are dedicated to all the best outfits, and everyone remembers that time the prime minister answered his phone in the middle of dinner (and there was much shock and horror).

Then prime minister Göran Persson, next to Crown Princess Victoria, in 2003. Photo: Jonas Ekströmer/TT

10:26 Americans dominate

The economics prize is the only Nobel not originally included in Alfred Nobel's last will and testament – it was established in 1968 to celebrate the Swedish central bank's 300th anniversary. Since it was first awarded in 1969, Americans have dominated the prize. Here is a list of the winners (AFP):

2017: Richard Thaler (US)

2016: Oliver Hart (Britain-US) and Bengt Holmström (Finland)

2015: Angus Deaton (Britain-US)

2014: Jean Tirole (France)

2013: Eugene Fama, Lars Peter Hansen and Robert Shiller (US)

2012: Alvin Roth and Lloyd Shapley (US)

2011: Thomas Sargent and Christopher Sims (US)

2010: Peter Diamond and Dale Mortensen (US) and Christopher Pissarides

2009: Elinor Ostrom and Oliver Williamson (US)

2008: Paul Krugman (US)

2007: Leonid Hurwicz, Eric Maskin and Roger Myerson (US)

2006: Edmund Phelps (US)

2005: Thomas Schelling (US), Robert J. Aumann (US-Israel)

2004: Finn Kydland (Norway), Edward Prescott (US)

2003: Robert Engle (US), Clive Granger (Britain)

2002: Daniel Kahneman (Israel-US) and Vernon Smith (US)

2001: George Akerlof (US), A. Michael Spence (US), Joseph Stiglitz (US)

2000: James Heckman (US), Daniel McFadden (US)

1999: Robert Mundell (Canada)

1998: Amartya Sen (India)

1997: Robert Merton (US), Myron Scholes (US)

1996: James Mirrlees (Britain), William Vickrey (US)

1995: Robert Lucas Jr (US)

1994: John Harsanyi (US), John Nash (US), Reinhard Selten (Germany)

1993: Robert Fogel (US), Douglass North (US)

1992: Gary Becker (US)

1991: Ronald Coase (Britain)

1990: Harry Markowitz (US), Merton Miller (US), William Sharpe (US)

1989: Trygve Haavelmo (Norway)

1988: Maurice Allais (France)

1987: Robert Solow (US)

1986: James Buchanan (US)

1985: Franco Modigliani (US)

1984: Richard Stone (Britain)

1983: Gerard Debreu (US)

1982: George Stigler (US)

1981: James Tobin (US)

1980: Lawrence Klein (US)

1979: Theodore Schultz (US), Arthur Lewis (Britain)

1978: Herbert Simon (US)

1977: Bertil Ohlin (Sweden), James Meade (Britain)

1976: Milton Friedman (US)

1975: Leonid Kantorovich (Soviet Union), Tjalling Koopmans (US)

1974: Gunnar Myrdal (Sweden), Friedrich von Hayek (Britain)

1973: Vassily Leontief (US)

1972: John Hicks (Britain), Kenneth Arrow (US)

1971: Simon Kuznets (US)

1970: Paul Samuelson (US)

1969: Ragnar Frisch (Norway), Jan Tinbergen (Netherlands)

10:15 Nobel Prize in Economics 2018

Good morning and welcome to the final day of Nobel Prize announcement season. Today we're at the edge of our seats waiting to find out who will be awarded this year's Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (or just call it the Nobel Economics Prize… if you don't tell on me, neither will I). The Local's Catherine Edwards is on her way to the Royal Swedish Academy of Sciences for the press conference at 11.45am, and live blogging this day for you is our editor Emma Löfgren.

To catch up with last week's announcement, follow these links:





In case you're wondering why there's no Nobel Prize in Literature this year, you can read more about that HERE.

Member comments

Become a Member to leave a comment.Or login here.