William Nordhaus

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 Certificate from the Institut d'Etudes Politiques (1962) and a PhD from MIT (1967).[11][10][12] 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,[13][12] 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.[12] Nordhaus served as the chairman of the Board of Directors of the Boston Federal Reserve Bank between 2014 and 2015.[14]

Nordhaus lives in New Haven, Connecticut, with his wife, Barbara, a social worker in the Yale Child Study Center.[12]

Nordhaus is the author or editor of over 20 books. One of his early works, he partnered with Paul Samuelson as a co-author for an introductory textbook entitled Economics. Nordhaus worked alongside Samuelson from the 12th edition until the 19th, starting in 1985.[15][16] It was first published in 1948 and has appeared in nineteen different editions and seventeen different languages. It was known as a best-selling economics textbook for decades and is still extremely popular today. Economics was called a “canonical textbook”, and the development of mainstream economic thought has been traced by comparing the fourteen editions under Samuelson’s editing.

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.[17]

In 1972 Nordhaus, along with fellow Yale economics professor James Tobin, published Is Growth Obsolete?,[18] 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 of 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).[19]

Palda summarizes the importance of Nordhaus's 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."[20]

Economist Steve Keen has severely criticized Nordhaus work[35] and said that his claim that a 4°C increase in global temperature over pre-industrial levels is only going to reduce GDP per capita by between 2% and 4% is nonsense. Keen disagrees that Nordhaus's "Damage Function" should be a quadratic equation. To demonstrate this he says that since his damage function is symmetrical "it predicts precisely the same level of damage to GDP from a fall of, for example, 4°C in the global average temperature, as it does for a rise of 4°C." If we try to apply the function to a period we had 20,000 years ago, during the last Ice Age, where countries like Canada, Ireland, Scotland, northern Germany, Poland, Denmark, Norway, and Sweden were under a kilometer or more of ice, the function would also estimate a reduction of GDP by 2% and 4%.[36]

Others have also pointed out that climate scientists and ecologists have a very negative opinion of Nordhaus's early work. Dr. Jason Hickel, who researches ecological economics, writes that "Many believe that the failure of the world’s governments to pursue aggressive climate action over the past few decades is in large part due to arguments that Nordhaus has advanced." One of his criticisms is that Nordhaus uses a very high discount rate which allows him to argue that we shouldn’t reduce emissions too quickly, because the economic cost to people today will be higher than the benefit of protecting people in the future.[37]

Most climate scientists assume non-linear impacts.[38]

• Nordhaus, William (July 2006). "Electoral victory and statistical defeat? Economics, politics, and the 2004 Presidential election". Quarterly Journal of Political Science. 1 (3): 313–322. doi:10.1561/100.00000014.

• Samuel Randalls (2011). "Optimal Climate Change: Economics and Climate Science Policy Histories (from Heuristic to Normative)". Osiris. 26 (1): 224–242. doi:10.1086/661273. JSTOR 10.1086/661273. PMID 21936195. S2CID 41522654.

Wikiquote has quotations related to: William Nordhaus

• William Nordhaus (Yale Home Page)
• The Question of Global Warming Nordhaus exchange with Freeman Dyson and others from The New York Review of Books
• Energy: Friend or Enemy? October 27, 2012 in The New York Review of Books
• "William Nordhaus". JSTOR.
• William Nordhaus on Nobelprize.org including the Prize Lecture Climate Change: The Ultimate Challenge for Economics