Americans William Nordhaus and Paul Romer have won the 2018 Nobel Economics Prize for work in integrating climate change and technological innovation into economic analysis, the Royal Swedish Academy of Sciences said.
William Nordhaus, of Yale University, was the first to create a quantitative model that described the interplay between the economy and the climate.
Paul Romer, of New York University's Stern School of Business, has shown how economic forces govern the willingness of firms to produce new ideas and innovations.
BREAKING NEWS: ⁰The Royal Swedish Academy of Sciences has decided to award the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2018 to William D. Nordhaus and Paul M. Romer. #NobelPrize pic.twitter.com/xUs6iSyI7h— The Nobel Prize (@NobelPrize) October 8, 2018
This lays the foundations for a new model for development, known as endogenous growth theory.
"Their findings have significantly broadened the scope of economic analysis by constructing models that explain how the market economy interacts with nature and knowledge," the academy said in statement.
Worth 9 million Swedish crowns ($1m), the economics prize was established in 1968.
It was not part of the original group of five awards set out in Swedish industrialist Alfred Nobel's 1895 will.
"This year's Laureates do not deliver conclusive answers, but their findings have brought us considerably closer to answering the question of how we can achieve sustained and sustainable global economic growth," the Academy said.
The Nobel prizes for physiology or medicine, physics, chemistry and peace were awarded last week.
This year's awards have stood out for two reasons.
Proceedings have been overshadowed by the absence of the literature prize, postponed to give the Swedish Academy time to restore public trust after a sexual assault scandal.
Three women have been awarded Nobel prizes, an unusually large number for a single year.
Since it was first awarded in 1969, Americans have dominated the Nobel prize for Economics.
Here is a list of the winners:
2018: William Nordhaus (US) and Paul Romer (US)
2017: Richard Thaler (US)
2016: Oliver Hart (Britain-US) and Bengt Holmstrom (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 (Cyprus-Britain)
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)