Hall and Woodford win Nobel Prize in Economic Sciences
The American economists are honoured for models that help explain economic shocks.
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Robert E. Hall and Michael Woodford were awarded the Nobel Prize in Economic Sciences on Monday. The Swedish Academy is honouring their work on the microeconomic foundations of macroeconomic stabilisation.
The prize was announced in Stockholm on Monday by the Royal Swedish Academy of Sciences. Hall is affiliated with Stanford University and Woodford with Columbia University. Both were born in the United States and work on the economic analysis of fluctuations in output, consumption and prices.
At the heart of their research is the link between the decisions of individual households and companies on the one hand and developments in the economy as a whole on the other. Macroeconomic models describe, for example, inflation, unemployment and economic growth. The laureates have helped ensure that such models better reflect the behaviour of consumers and businesses.
According to the academy, their work provides a theoretical basis for models used by central banks and governments during economic shocks. These may include sudden changes in energy prices or household consumption. The prize does not mean that Hall and Woodford prescribe one specific policy.
For central banks, the way households and businesses respond to interest rates, income expectations and uncertainty is particularly important. If consumers spend less, that can dampen demand. If companies postpone investment, a temporary shock can have longer-lasting effects. Models seek to make such mechanisms easier to understand, but remain dependent on assumptions and available data.
The prize is therefore neither a new economic forecast nor a judgement on the policy of a specific central bank. It is recognition of theoretical and methodological work that has influenced the way economists view stabilisation policy over a longer period. Which policy choice is sensible remains dependent on the circumstances at the time.
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel is formally not a prize included in Alfred Nobel's original will. The Swedish central bank established the prize in 1968 to mark its three-hundredth anniversary. The prize is presented during the Nobel ceremony in December.
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The prize, the laureates and the subject for which they were honoured were reported by AP. The official Nobel calendar confirms that the economics prize was announced on 12 October.
- confirmed Robert E. Hall and Michael Woodford were awarded the Nobel Prize in Economic Sciences on 12 October 2026. — Reported by AP. source
- confirmed The prize was awarded for work on the microeconomic foundations of macroeconomic stabilisation. — The wording and explanation appear in the AP report. source
- confirmed The prize was established by the Swedish central bank in 1968. — Background information in the AP report. source
Editor's note
The prize and the laureates were confirmed by AP; the official Nobel page confirms the announcement date and the status of the prize. The explanation of the economic significance is context, not a new policy conclusion.Sources
- Robert E. Hall and Michael Woodford win Nobel memorial prize in economics — The Associated Press
- Prize announcement dates — Nobel Prize Outreach