Robert Hall and Michael Woodford win 2026 Nobel economics prize for models that help stabilise economies
American economists Robert E. Hall and Michael Woodford have won the 2026 Nobel Memorial Prize in Economic Sciences for developing models that help governments and central banks manage economic downturns, inflation and other shocks, the Royal Swedish Academy of Sciences announced on October 12.
Hall, a professor at Stanford University, and Woodford, a professor at Columbia University, were awarded the prize "for microeconomic foundations of macroeconomic stabilisation."
Their research helped rebuild economic models after the crises of the 1970s exposed weaknesses in earlier approaches to managing inflation, unemployment and economic growth.
Rather than relying primarily on statistical relationships between broad economic indicators, the laureates developed models that account for how individual households and businesses make decisions.
A key insight is that people and companies respond not only to current economic conditions but also to expectations about the future.
That means governments and central banks can influence economic activity through both policy decisions and communication about their future plans.
The models have helped policymakers understand how changes in interest rates, government spending and economic expectations can reduce the severity of recessions and periods of overheating.
"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 economics prize committee.
Hall, born in 1943, earned his doctorate at the Massachusetts Institute of Technology in 1967. Woodford, born in 1955, received his doctorate from the same institution in 1983.
The laureates will share a prize of 12 million Swedish kronor.
Unlike the original Nobel Prizes, the economics award was established by Sweden's central bank in 1968 in memory of Alfred Nobel.