When Yale Sterling Professor of Economics and former University Provost William Nordhaus ’63 entered his Intermediate Macroeconomics classroom on Monday morning, he was greeted by a standing ovation from his students. “Special rule today,” Nordhaus said as students took out their phones to take pictures, “You can have your cell phones.”
Nordhaus was in his bedroom Monday morning when he received a phone call from his daughter, who congratulated him on “it.” Confused, he asked her what “it” was.
As his daughter explained what “it” meant, Nordhaus found out that he had just won the Nobel Memorial Prize in Economic Science. He received the award alongside New York University professor of economics Paul Romer for their work highlighting the importance of public policy in bolstering long-term sustainable economic growth, according to a press release from the Royal Swedish Academy of Science, the academy that awarded the prize.
Nordhaus, an advocate for implementing a carbon tax to curb emissions, was recognized for his work on how climate change impacts economic growth while his colleague, Romer, shared half the award for his research highlighting the role of policy in fostering technological innovation.
“It’s a wonderful day. It’s so nice,” Nordhaus told the News. “It’s good for economics. People have written to me and said that in these dark times, it’s a bright spot.”
The “bright spot” refers to the recognition his research has received, especially given President Donald Trump’s decision to withdraw from the Paris Climate Accord in 2017 and the current administration’s general attitude shift against climate change.
Just hours before the announcement of Nordhaus’ award, the United Nations’ scientific panel released a report warning that if no actions are taken to curb climate change, there could be dire consequences — including food shortages and wildfires — as soon as 2040. Nordhaus said the report emphasizes the importance of the work on climate change that has been done to date.
“The more we allow climate change to occur, the worse it’s going to get,” Nordhaus added.
In the 1970s, long before other academics became concerned with the economic consequences of climate change, Nordhaus conducted research on the relationship between the economy and environmental damage. Nordhaus found that economic activity such as work in factories triggered pollution, which in turn negatively affected the economy.
In the 1990s, Nordhaus developed the Dynamic Integrated Climate-Economy model, which uses economic and climate data to assess the costs and benefits of taking steps to slow greenhouse warming. Today, policymakers throughout the world use the model when assessing possible outcomes of climate policy intervention.
Yale economics professor Steven Berry said the model is “frequently referenced” in discussions about proper policy responses to climate change.
This is the second Nobel Prize that has been awarded to a faculty member in the University’s economics department in the past five years. In 2013, economics professor Robert Shiller won the same Nobel Prize for his pioneering work on financial markets and asset prices.
“I am a big admirer of Bill Nordhaus, one of most intelligent and well-directed economists I have ever met,” Shiller told the News. “He is one of the reasons I came to Yale in 1982.”
Giuseppe Moscarini, an economics professor, said that many people in the department expected Nordhaus to be on the Nobel Committee’s shortlist at some point because of the quality and significance of his work.
“This is obviously great news,” Moscarini said. “We were all expecting it, but it’s different when the rest of the world acknowledges it.”
Nordhaus said that the Economics Department will host a party to celebrate his award.
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