Robert Hall and Michael Woodford win 2026 Nobel economics prize
publishers 92articles 104first reported 12 Oct, 05:27 UTCdeveloping since 12 Oct · 10 editionstop 25 #11
U.S. economists Robert E. Hall and Michael Woodford have won the 2026 Nobel economics prize for developing models that help governments and central banks stabilise economies during shocks.
The Royal Swedish Academy of Sciences announced the award Monday, recognising the pair “for microeconomic foundations of macroeconomic stabilisation.” Hall is a professor at Stanford University, while Woodford is a professor at Columbia University. They will share 12 million Swedish kronor, about $1.2 million.
Their research rebuilt macroeconomic models around the decisions and expectations of individual households and businesses, rather than relying primarily on historical statistical relationships among inflation, production and consumption. The academy said the resulting New Keynesian models help policymakers explain and quantify how fiscal and monetary measures affect business cycles.
The work addressed weaknesses exposed in older Keynesian models during the oil crises of the 1970s, when economies experienced high inflation alongside weak growth and unemployment. The newer framework has since been adopted by central banks and finance ministries worldwide and informed tools including forward guidance about the future path of interest rates.
“The laureates’ work has provided us with a stable theoretical foundation for the models that are now used by central banks and governments around the world,” prize committee chair John Hassler said. Woodford said the framework proved useful after the global financial crisis, when policymakers supplemented conventional interest-rate cuts with clearer communication about future policy.
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