US academics Robert E. Hall and Michael Woodford have won the 2026 Nobel Prize in economics for their work on the microeconomic foundations of macroeconomic stabilisation, the Royal Swedish Academy of Sciences announced on Monday.
The prestigious award, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is the final Nobel prize to be given out this year and is worth 12 million Swedish crowns (about $1.2 million). The two laureates will split the prize money equally.
Models for smoothing economic shocks
The two laureates developed new macroeconomic models that improved the ability to implement effective stabilisation policy, enabling well-timed fiscal and monetary policy measures that can reduce the intensity of damaging swings in the economy.
"The laureates have helped us smooth out the economy's peaks and troughs," the academy said in a statement. "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," said John Hassler, chair of the Committee for the Prize in Economic Sciences.
Rather than basing models on statistical links between macroeconomic variables such as inflation, production and consumption, Hall and Woodford built them on a microeconomic foundation — on how individual households and businesses make decisions. A central insight was that households and businesses are "forward-looking" when deciding about spending or saving, so how governments and central banks communicate their policies can influence people's view of the future.
The laureates
Hall, 83, born in Palo Alto, California, is a professor at Stanford University. Woodford, born in Chicopee, Massachusetts in 1955, is a professor at Columbia University. They will each receive 6 million Swedish kronor (about $598,000).
Last year's winners, Joel Mokyr, Philippe Aghion and Peter Howitt, won for work on "creative destruction" and how new technology and production methods can boost growth and living standards.
Sources:
Americans Hall and Woodford win 2026 Nobel economics prize - Reuters
Americans Robert E. Hall and Michael Woodford awarded the Nobel Prize in economics - CNN
The prestigious award, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is the final Nobel prize to be given out this year and is worth 12 million Swedish crowns (about $1.2 million). The two laureates will split the prize money equally.
Models for smoothing economic shocks
The two laureates developed new macroeconomic models that improved the ability to implement effective stabilisation policy, enabling well-timed fiscal and monetary policy measures that can reduce the intensity of damaging swings in the economy.
"The laureates have helped us smooth out the economy's peaks and troughs," the academy said in a statement. "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," said John Hassler, chair of the Committee for the Prize in Economic Sciences.
Rather than basing models on statistical links between macroeconomic variables such as inflation, production and consumption, Hall and Woodford built them on a microeconomic foundation — on how individual households and businesses make decisions. A central insight was that households and businesses are "forward-looking" when deciding about spending or saving, so how governments and central banks communicate their policies can influence people's view of the future.
The laureates
Hall, 83, born in Palo Alto, California, is a professor at Stanford University. Woodford, born in Chicopee, Massachusetts in 1955, is a professor at Columbia University. They will each receive 6 million Swedish kronor (about $598,000).
Last year's winners, Joel Mokyr, Philippe Aghion and Peter Howitt, won for work on "creative destruction" and how new technology and production methods can boost growth and living standards.
Sources:
Americans Hall and Woodford win 2026 Nobel economics prize - Reuters
Americans Robert E. Hall and Michael Woodford awarded the Nobel Prize in economics - CNN
