The 2018 Nobel Prize for economics has been awarded to US economists William Nordhaus and Paul Romer for integrating innovation and climate with economic growth.

Nordhaus, a professor at Yale University, and Romer, a former World Bank chief economist now at New York University’s Stern School of Business, addressed “some of our time’s most basic and pressing questions about how we create long-term sustained and sustainable growth”, the Royal Swedish Academy of Sciences said in a statement on Monday.

It said the pair “significantly broadened the scope of economic analysis by constructing models that explain how the market economy interacts with nature and knowledge”.

Nordhaus, 77, was specifically honoured for “integrating climate change into long-run macroeconomic analysis”. The 62-year-old Romer won for “integrating technological innovations into long-run macroeconomic analysis”.

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Tipped as frontrunners for the award in recent years, the pair will share the nine million Swedish kronor (about $1.01m) prize.

Hours before the award, the United Nations panel on climate change warned of the risks of more frequent heat waves, floods and drought in some regions as well as the loss of species without a radical rethink in how societies operate.

Last year, the honour went to US economist Richard Thaler, cofounder of the so-called “nudge” theory, which demonstrates how people can be persuaded to make decisions that leave them healthier and happier.

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.

Last week, after the prizes for medicine, physics and chemistry were announced, the most highly anticipated Nobel, that for peace, went to Yazidi women’s campaigner Nadia Murad and Congolese doctor Denis Mukwege for their work in fighting sexual violence in conflicts around the world.