Robert Hall and Michael Woodford Win 2026 Nobel Prize in Economics
The Royal Swedish Academy of Sciences awarded the 2026 Nobel Prize in Economics to Robert E. Hall of Stanford University and Michael Woodford of Columbia University for developing models that help central banks and governments steady their economies against external shocks.
American professors Robert E. Hall and Michael Woodford have won the 2026 Nobel Prize in Economics for developing new economic models that help governments and central banks stabilize their economies to minimize the impact of external shocks, the Royal Swedish Academy of Sciences announced in Stockholm on Monday.
The academy said the laureates were honored “for microeconomic foundations of macroeconomic stabilization.” Hall, born in Palo Alto, California, in 1943, is a professor at Stanford University. Woodford, born in Chicopee, Massachusetts, in 1955, is a professor at Columbia University. Each will receive 6 million Swedish kronor, about $598,000, in prize money.
“The laureates have helped us smooth out the economy’s peaks and troughs,” the academy said in a statement, adding that their models have been “extremely helpful in dealing with the economic downturns that have affected us.” Rather than studying links between broad variables such as inflation, production, and consumption, Hall and Woodford built their models from microeconomics: how individual households and businesses make decisions.
Forward-looking households
Central to their work is the idea that households and businesses are forward-looking when they decide how much to save or how to price products. Because of that, governments and central banks can influence expectations by communicating their fiscal and monetary policy plans, and so move the economy in the right direction, the academy said.
“Their 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. “With them, we are better equipped to deal with shocks in the economy, such as energy crises or sudden changes in how much households consume.”
Closing out this year’s Nobels
The prize is officially known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. It was not established in Nobel’s will; Sweden’s central bank created it in 1968. The number of individuals who have received the prize now totals 101, only three of whom have been women.
The economics award concludes this year’s Nobel prizes. South African judge and human rights pioneer Navi Pillay received the Nobel Peace Prize on Friday, and Canadian writer Anne Carson won the Nobel Prize in Literature the day before that.
Reporting based on coverage by CNN and the National Bureau of Economic Research.
