William Nordhaus

William Nordhaus
BornWilliam Dawbney Nordhaus
(1941-05-31) May 31, 1941 (age 77) [1]
Albuquerque, New Mexico, U.S.
Education Yale University (BA, MA)
Sciences Po
Massachusetts Institute of Technology (PhD)
Awards BBVA Foundation Frontiers of Knowledge Award (2017)
Nobel Memorial Prize in Economic Sciences (2018)
Scientific career
Fields Environmental economics
Institutions Yale University
Doctoral advisor Robert Solow [2]

William Dawbney Nordhaus (born May 31, 1941) is an American economist and Sterling Professor of Economics at Yale University, best known for his work in economic modelling and climate change. He is, together with Paul Romer, one of the laureates of the 2018 Nobel Memorial Prize in Economic Sciences. [3] Nordhaus received the prize "for integrating climate change into long-run macroeconomic analysis". [4]

Education and career

Nordhaus was born in Albuquerque, New Mexico, the son of Virginia (Riggs) and Robert J. Nordhaus, [5] who co-founded the Sandia Peak Tramway. [6] [7] Robert J. Nordhaus was from a German Jewish family — his father Max Nordhaus (1865–1936) immigrated from Paderborn in 1883 and was a manager of The Charles Ilfeld Company branch in Albuquerque. [8] [9]

Nordhaus graduated from Phillips Academy in Andover and subsequently received his BA and MA from Yale in 1963 and 1973, respectively, where he was a member of Skull and Bones. [10] He also holds a Certificat from the Institut d'Etudes Politiques (1962) and a PhD from MIT (1967). [10] [11] He was a Visiting Fellow of Clare Hall, Cambridge in 1970-1971. He has been a member of the faculty at Yale since 1967, in both the Economics department and the School of Forestry and Environmental Studies, [12] [11] and has also served as its Provost from 1986–1988 and its Vice President for Finance and Administration from 1992–1993. His tenure as provost was among the shortest in the university's history. He has been on the Brookings Panel on Economic Activity since 1972. During the Carter administration, from 1977–1979, Nordhaus was a member of the Council of Economic Advisers. [11] Nordhaus served as the chairman of the Board of Directors of the Boston Federal Reserve Bank between 2014 and 2015. [13]

Nordhaus lives in New Haven, Connecticut, with his wife, Barbara, a social worker in the Yale Child Study Center. [11]

Writing

Nordhaus is the author or editor of over 20 books. He is the co-author of the textbook Economics , the original editions of which were written by fellow Nobel Laureate Paul Samuelson. The book is currently in its 19th edition and has been translated into at least 17 other languages.

He has also written several books on global warming and climate change, one of his primary areas of research. Those books include Managing the Global Commons: The Economics of Climate Change (1994), which won the 2006 Award for “Publication of Enduring Quality” from the Association of Environmental and Resource Economics. Another book, with Joseph Boyer, is Warming the World: Economic Models of Global Warming (2000). His most recent book is The Climate Casino: Risk, Uncertainty, and Economics for a Warming World. [14]

In 1972 Nordhaus, along with fellow Yale economics professor James Tobin, published Is Growth Obsolete?, [15] an article that introduced the Measure of Economic Welfare (Index of Sustainable Economic Welfare) as the first model for economic sustainability assessment.

Nordhaus is also known for his critique on current measures of national income. He wrote, "If we are to obtain accurate estimates of the growth of real incomes over the last century, we must somehow construct price indexes that account for the vast changes in the quality and range of goods and services that we consume, that somehow compare the services of horse with automobile, of Pony Express with facsimile machine, of carbon paper with photocopier, of dark and lonely nights with nights spent watching television, and of brain surgery with magnetic resonance imaging" (1997, 30). [16]

Palda summarizes the importance of Nordhaus' insight as follows: "The practical lesson to be drawn from this fascinating study of lighting is that the way we measure the consumer price index is severely flawed. Instead of putting goods and their prices directly into the index we should reduce all goods to their constituent characteristics. Then we should evaluate how these goods can best be combined to minimize the cost of consuming these characteristics. Such an approach would allow us to include new goods in the consumer price index without worrying about whether the index of today is comparable to that of ten years ago when the good did not exist. Such an approach would also allow governments to more precisely calculate the rate at which welfare and other forms of aid should be increased. At present such calculations tend to overestimate the cost of living because they do not take into account the manner in which increases in quality reduce the monetary cost of maintaining a certain standard of living." [17]

Contributions on economics of climate change

Nordhaus has written on the economics of climate change. He is the developer of the DICE and RICE models, integrated assessment models of the interplay between economics, energy use, and climate change.

A Question of Balance: Weighing the Options on Global Warming Policies ISBN   978-0-300-13748-4 was published by Yale University Press on June 24, 2008.

In Reflections on the Economics of Climate Change (1993), he states: "Mankind is playing dice with the natural environment through a multitude of interventions – injecting into the atmosphere trace gases like the greenhouse gases or ozone-depleting chemicals, engineering massive land-use changes such as deforestation, depleting multitudes of species in their natural habitats even while creating transgenic ones in the laboratory, and accumulating sufficient nuclear weapons to destroy human civilizations." [18] Under the climate change models he has developed, in general those sectors of the economy that depend heavily on unmanaged ecosystems – that is, are heavily dependent upon naturally occurring rainfall, runoff, or temperatures – will be most sensitive to climate change. Agriculture, forestry, outdoor recreation, and coastal activities fall in this category." [19] Nordhaus takes seriously the potentially catastrophic impacts of climate change. [20]

Nordhaus, who has done several studies on the economics of global warming, criticized the Stern Review for its use of a low discount rate: [21]

The Review’s unambiguous conclusions about the need for extreme immediate action will not survive the substitution of discounting assumptions that are consistent with today’s market place. So the central questions about global-warming policy – how much, how fast, and how costly – remain open. The Review informs but does not answer these fundamental questions.

In 2013, Nordhaus chaired a committee of the National Research Council that produced a report discounting the impact of fossil fuel subsidies on greenhouse gas emissions. [22]

However, in a December 2016 discussion paper for the Cowles Foundation, his research using the updated DICE model ...confirms past estimates of likely rapid climate change over the next century if there are not major climate-change policies. It suggests that it will be extremely difficult to achieve the 2°C target of international agreements even if ambitious policies are introduced in the near term. The required carbon price needed to achieve current targets has risen over time as policies have been delayed. [23]

Honors

Scientific and engineering academies

Among many honors, he is a Member of the United States National Academy of Sciences and an Elected Fellow of the American Academy of Arts and Sciences. [11] He has been a foreign member of the Royal Swedish Academy of Engineering Sciences since 1999.

American Economic Association

In 2004, Nordhaus was designated a Distinguished Fellow of the American Economic Association (AEA), along with George P. Shultz and William A. Brock. [24] The accompanying AEA statement referred to his "knack for asking large questions about the measurement of economic growth and well-being, and addressing them with simple but creative insights," among them, his pioneering work on the political business cycle, [25] ways of using national income accounts data to devise economic measures reflecting better health, increases in leisure and life expectancy, and "constructing integrated economic and scientific models to determine the efficient path for coping with climate change". [26] In 2013, Nordhaus became president-elect of the AEA, and served as the association's president between 2014 and 2015. [27] [13]

Nobel Memorial Prize in Economics

Nordhaus was awarded the Nobel Memorial Prize in Economic Sciences in 2018 "for integrating climate change into long-run macroeconomic analysis." He shared the award with Paul Romer. [13]

Publications

References

  1. "Biographical Directory of the Council of Economic Advisers - Council of Economic Advisers (U.S.) - Google Books". Books.google.ca. 2007-03-13. Retrieved 2018-10-11.
  2. "PDS SSO". library.mit.edu.
  3. Appelbaum, Binyamin (October 8, 2018). "2018 Nobel in Economics Awarded to William Nordhaus and Paul Romer". The New York Times.
  4. "The Prize in Economic Sciences 2018" (PDF) (Press release). Royal Swedish Academy of Sciences. October 8, 2018.
  5. "Albuquerque Journal Obituaries". obits.abqjournal.com.
  6. "Brothers Battle Climate Change on Two Fronts".
  7. "Sandia Peak Ski & Tramway - History & Technology". sandiapeak.com.
  8. Nuzzo, Regina (June 27, 2006). "Profile of William D. Nordhaus". Proceedings of the National Academy of Sciences. 103 (26): 9753–9755. doi:10.1073/pnas.0601306103. PMID   16803963 via www.pnas.org.
  9. Rochlin, Harriet; Rochlin, Fred (October 9, 2018). "Pioneer Jews: A New Life in the Far West". Houghton Mifflin Harcourt via Google Books.
  10. 1 2 "William Dawbney Nordhaus Will Marry Barbara Feise" . Retrieved October 8, 2018.
  11. 1 2 3 4 5 "William D. Nordhaus". economics.yale.edu. Yale Department of Economics. Retrieved October 8, 2018.
  12. Harris, Richard (February 11, 2014). "Economist Says Best Climate Fix A Tough Sell, But Worth It". Washington, D.C.: National Public Radio. Retrieved October 1, 2017.
  13. 1 2 3 "Yale's William Nordhaus wins 2018 Nobel Prize in Economic Sciences". YaleNews. October 8, 2018. Retrieved October 8, 2018.
  14. William D. Nordhaus (October 22, 2013). The Climate Casino: Risk, Uncertainty, and Economics for a Warming World. Yale University Press. ISBN   978-0-300-18977-3.
  15. "Is Growth Obsolete? William Nordhaus and James Tobin, Yale University (Link)" (PDF).
  16. Nordhaus, William D. 1997. "Do Real Output and Real Wage Measures Capture Reality? The History of Light Suggests Not." The Economics of New Goods. Edited by Robert J. Gordon and Timothy F. Bresnahan. University of Chicago Press for the National Bureau of Economic Research. 27-70.
  17. Palda, Filip (2013). The Apprentice Economist: Seven Steps to Mastery. Cooper-Wolfling Press. ISBN   978-0987788047
  18. Nordhaus, W. D. '"Reflections on the economics of climate change", Journal of Economic Perspectives (1993); 7(4) 11–25 at p. 11
  19. Nordhaus, W. D. '"Reflections on the economics of climate change", Journal of Economic Perspectives (1993); 7(4) 11–25 at p. 15
  20. Nordhaus WD (November 1992). "An Optimal Transition Path for Controlling Greenhouse Gases" (PDF). Science . 258 (5086): 1315–1319. doi:10.1126/science.258.5086.1315.
  21. Nordhaus, William (May 3, 2007). "The Stern Review on the Economics of Climate Change" (PDF). Yale University.
  22. "U.S. Tax Code Has Minimal Effect on Carbon Dioxide and Other Greenhouse Gas Emissions, Report Says". National Academies. Retrieved July 7, 2015.
  23. William Nordhaus (December 2016). "Projections and uncertainties about climate change in an era of minimal climate policies" (PDF). Cowles Foundation . Retrieved February 25, 2017.
  24. American Economic Association "Distinguished Fellows".
  25. • William D. Nordhaus, 1975. "The Political Business Cycle," The Review of Economic Studies , 42(2), pp. 169-190.
       • _____, 1989:2. "Alternative Approaches to the Political Business Cycle," Brookings Papers on Economic Activity, p. p. 1-68.
  26. American Economic Association, 2004. "William D. Nordhaus, Distinguished Fellow".
  27. "American Economic Association". www.aeaweb.org.

Further reading

Academic offices
Preceded by
Claudia Goldin
President of the American Economic Association
2014– 2015
Succeeded by
Richard Thaler