American academics Robert Hall and Michael Woodford win the Nobel Prize in Economics
Robert Hall and Michael Woodford have been awarded the 2026 Nobel Prize in Economics for their work on the models used by central banks to stabilize economies.
U.S. academics Robert Hall and Michael Woodford won the 2026 Nobel Prize in Economics thanks to decades of work developing the fundamental models used by central banks and finance ministries to stabilize economies.
Combating Economic Shocks
John Hassler, Chair of the Prize Committee, stated that with these winners, we are now much better equipped to deal with economic shocks such as energy crises or sudden changes in household consumption.
Micro-Level Decisions
One of the laureates' key insights was that economies can be kept in balance not by using top-down theories of how they operate, but by taking into account the millions of decisions made at the micro level by households and businesses.
Modern Monetary Policy Tools
Michael Woodford of Columbia University stated that authorities should not view stabilizing the economy as an exercise conducted by pull-lever operators independently of whether people on the inside understand those processes.
Forward Guidance
The work of Robert Hall from Stanford University and Woodford underpinned concepts used today, such as forward guidance on the future path of monetary policy and the delay in price changes following demand.
Scientific Contributions and Evaluations
Hall stated that he had dedicated his career to understanding how the economy works, describing the award as a wonderful surprise, and emphasized that he investigates the truth and importance of new ideas.