Economics & Economy

How Nobel Prize winner Paul Romer redefined economics

Oct 8, 2018

Paul Romer of New York University's Stern School of Business won the Nobel Prize for economics Monday for his work connecting technological innovation to economic growth. He shared the prize with William Nordhaus of Yale, who researches the economic impact of climate change.

Romer's big breakthrough was this: He took models of economic growth and added a missing, magic ingredient.

There's a new report out on climate change science and it's bleak. The Intergovernmental Panel on Climate Change, made up of thousands of scientists, finds the earth's temperature has risen 1 degree Celsius — or 1.8 degrees Fahrenheit — since pre-industrial times. And if we don't keep warming under 2 degrees? Well, the oceans could rise an extra four inches, "virtually all" coral reefs could be lost, and grain yields and water available would plummet. We can see this in dollar terms, as in $8 trillion to $15 trillion in costs, according to the report.

To be an oil person in Kansas is to understand that bad times follow good and that betting on any dip or upswing is a game for suckers.

Yet it can be so tempting when crude prices soar. There’s so much money to be made. Or, of course, lost.

The far-flung, mostly small and independent oil and gas companies in the state found themselves laid flat by the bust of 2014. It still stings.

Two Americans won the Nobel Prize in economics. Who are they?

Oct 8, 2018

The Nobel Memorial Prize in Economic Sciences was awarded to Yale's William Nordhaus and New York University's Paul Romer on Monday morning. Nordhaus developed a way to think about the benefits and costs of mitigating climate change. Romer is also familiar to Marketplace listeners: He figured out a way to factor in technology in economic growth calculations. To help tell us more about the winners, Marketplace Morning Report's David Brancaccio talked to economics contributor Chris Farrell. Below is an edited transcript of their conversation.

It was lunch time in Manhattan and Anastasia Tzdanides had just made a makeup run to Sephora. She picked up “some Hourglass products; a brush, blush, bronzer,” she said.

At 23, Tzdanides is a typical young cosmetics buyer. She buys lots of different brands after she's researched them online. Her mother, Johanna, who was shopping with her, said her generation did things differently. 

“We stuck with one brand; you used Clarins or you used Lancome. Where here you try the different ones and you kind of mix everything,” she said.

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