Nordhaus, from Yale University, and Romer, from New York University's Stern School of Business, were honored for their contribution to what the academy called "some of our time's most fundamental and pressing issues: longterm sustainable growth in the global economy and the welfare of the world's population". 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.
"Darn right they were sending a message", Warsh said. The metric is increasingly used when implementing climate change policies.
Nordhaus' work has led him to conclude that the best way to reduce greenhouse gas emissions and mitigate their effects is a globally enforced system of carbon taxes - a course of action is recommended in the IPCC's report.
"If we set about making the policy changes that are required here, we can absolutely make substantial progress toward protecting the environment and do it without giving up the chance to sustain growth", Romer said via phone during a news conference.
"It's an ingenious pairing", David Warsh, author of the 2007 book "Knowledge and the Wealth of Nations" told the Associated Press.
He's also studied wage and price behavior, health economics, augmented national accounting, the political business cycle, productivity, and the "new economy".
Trump takes aim at 'crazy' Fed as markets sink following US slump
Wall Street extended its losses Wednesday afternoon as markets continued to skid, with the Nasdaq leading the losses. I think the Fed has gone insane ", Trump told reporters on his way to a rally in Pennsylvania.
William Nordhaus, one of two men to receive the Nobel prize in economics on Monday, grew up in Albuquerque and travels yearly to New Mexico for summer visits with family. Both are macroeconomists dealing with long-run dynamics-big questions of what spurs economic growth, the importance of sustainable growth, and how to tackle climate change.
One of Romer's insights was that ideas differ from other goods or services.
Mr Nordhaus has argued that climate change should be considered a "global public good" like public health and worldwide trade, and regulated accordingly, but not through a command-and-control approach. "Nordhaus has been concerned all along with repairing the damage" to the environment, while "Romer has been writing about the means at your disposal" to take on the technological challenge, he added.
Romer received his bachelor of science in mathematics and doctorate in economics from the University of Chicago.
Romer is on leave from NYU and joined NYU Stern in 2010.
The recipient of the Economics award previous year was Richard H. Thaler for his pioneering work in establishing that human behaviour is irrational and in defiance of economic theory.
The research of Nordhaus and Romer is united by an interest in what drives economic growth and how to respond when unregulated market forces fail to deliver desired results.
Prior to his work, macroeconomic research emphasised technological innovation as the primary driver of economic growth, but had not modelled how economic decisions and market conditions determine the creation of new technologies.