Robert E. Hall and Michael Woodford win 2026 Nobel Prize in Economics
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Robert E. Hall of Stanford University and Michael Woodford of Columbia University have won the 2026 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for their work on macroeconomic stabilisation.
The Royal Swedish Academy of Sciences announced the award on Monday, recognising the duo “for microeconomic foundations of macroeconomic stabilisation.”
Hall and Woodford developed macroeconomic models that help policymakers determine the timing and scale of fiscal and monetary measures. Their work has improved understanding of how governments and central banks can reduce economic fluctuations.
Their research helped revive stabilisation policies rooted in the ideas of economist John Maynard Keynes. These policies faced criticism during the oil shocks of the 1970s, when rising unemployment and runaway inflation led to a prolonged period of stagflation.
Hall and Woodford developed models based on how households and businesses make decisions, rather than relying solely on statistical relationships between economic variables such as inflation, output and consumption.
Their work highlights how expectations influence economic activity. Households and businesses make forward-looking decisions about saving and pricing. Governments and central banks can therefore influence economic outcomes by clearly communicating their policy plans.
“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.
He added that the models help policymakers respond to shocks, including energy crises and sudden changes in household consumption.
Last year's economics prize was awarded to Joel Mokyr, Peter Howitt and Philippe Aghion for their work on innovation-driven economic growth. In 2024, Daron Acemoglu, Simon Johnson and James A. Robinson received the prize for their studies on institutions and their impact on prosperity.