Nordhaus and Paul Romer, were awarded the Nobel Memorial Prize in Economic Sciences on Monday for their work in implementing climate change and technological innovation, respectively, into long-run macroeconomic analysis.
Romer, who served as chief economist at the World Bank until January 2018, has helped shape the endogenous (from within a system) growth theory, which states that productivity gains can be tied directly to speedy innovation and more investments in workers.
Nordhaus, 77, was specifically honoured for "integrating climate change into long-run macroeconomic analysis".
The Nobel economics prize wraps up the 2018 awards season, notable this year for the lack of a literature prize, postponed by a year for the first time in 70 years over a rape scandal that came to light as part of the #MeToo movement.
The academy said Romer's work "explains how ideas are different to other goods and require specific conditions to thrive in a market".
Michael reaches hurricane strength as it churns toward Florida
The storm is expected to dump 4 to 8 inches of rain on Cuba, with some areas of the island nation seeing up to a foot of water. A Hurricane Watch has been issued from the Alabama-Florida border eastward to the Suwanee River.
He teaches economics at New York University, where he founded the Stern Urbanisation Project, which researches how policymakers can harness the rapid growth of cities to create economic opportunity and undertake systemic social reform.
The laureates of the Nobel Prize in Economics, William Nordhaus, left, and Paul Romer, are seen at a press conference at The Royal Swedish Academy of Sciences in Stockholm, on October 8, 2018.
Worth 9 million Swedish crowns ($1.4 million), the economics prize was established in 1968.
Only one woman, Elinor Ostrom, has won the prize, and Leonid Hurwicz is the oldest person to be awarded a Nobel prize.