WORLD
Robert Hall, Michael Woodford win economics Nobel for models to tackle shocks
- IBJ Bureau
- Oct 13, 2026
American-born economists Robert E Hall and Michael Woodford won the Nobel memorial prize in economics on Monday for their work on the microeconomic foundations of macroeconomic stabilisation.
Mr Hall is affiliated with Stanford University in California, and Mr Woodford with Columbia University in New York.
The award was announced by the Royal Swedish Academy of Sciences in Stockholm.
“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,” John Hassler, the chair of the Committee for the Prize in Economic Sciences, said in a news release. “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,” the committee added.
During the stagflationary oil crises of the 1970s, widely accepted Keynesian models — which prescribed cutting interest rates and increasing government budget deficits to tackle recessions — seemed to no longer work.
To revitalise these models, the economists’ separate work has looked beyond macroeconomic variables, such as inflation, production and consumption, and showed how individual households and businesses collectively shape the economy through decision-making based on their expectations for the future.
The economics prize is formally known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel.
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