William D. Nordhaus and Paul M. Romer were awarded the 2018 Nobel Prize in Economic Sciences for integrating innovation and climate with economic growth, the Royal Swedish Academy of Sciences announced on Monday.

The academy said Romer's work "explains how ideas are different to other goods and require specific conditions to thrive in a market."

Previous macroeconomic research had emphasized technological innovation as a driver of growth but had not modeled how market conditions and economic decisions affected creation of new technologies, the academy said.

"I got two phones calls this morning, didn't answer any of them, thought they were spam," Romer told a press conference on site, "I didn't expect the Prize at all."

Responding to questions about this year's prize and climate change, Romer said, "Optimism helps to motivate people. The current situation is that many think it's too costly, so they deny the existence of climate change, I hope the Prize will help people to see through some policy changes we can make substantial progress without giving up chances of sustainable growth. I hope to see policy shifts and necessary progresses been taken."

 "It's entirely possible for human to produce less carbon," Romer said while emphasizing that he was "a conditional optimist", that "if we start doing the right thing."

Nordhaus in the 1990s became the first person to create a model that "describes the global interplay between the economy and the climate," the academy said.

He showed that "the most efficient remedy for problems caused by greenhouse gases is a global scheme of universally imposed carbon taxes."

He has been a faculty member at Yale since 1967.

His model integrates theories and empirical results from physics, chemistry and economics, which is now widely spread and is used to simulate how the economy and the climate co-evolve. It is used to examine the consequences of climate policy interventions, for example carbon taxes, according to the statement.

The economics prize is the last of the Nobels to be announced this year. Last year's prize went to American Richard Thaler for studying how human irrationality affects economic theory.

Worth 9 million Swedish crowns (1 million US dollars), 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.