Americans Hall and Woodford win economics Nobel for stabilisation models

Robert Hall and Michael Woodford, Americans Robert Hall and Michael Woodford, were awarded the 2026 Nobel Prize in Economics on Monday for their work on stabilizing models of monetary and fiscal policy. The two were honored for developing new models to manage recessions and crises that traditional tools fail to address. The Royal Swedish Academy of Sciences stated that these models enable timely fiscal and monetary measures to reduce economic peaks and troughs.

Hall, 83, from Stanford University, and Woodford, 50, from Columbia University, independently developed these models by focusing on a microeconomic foundation rather than statistical links between macroeconomic variables. They considered the total impact of households and businesses on the economy, emphasizing forward-looking behavior of individuals in decision-making.

This understanding allows government and central bank communication to influence future expectations. The laureates' work provides a stable theoretical basis for models used by central banks and governments worldwide. John Hassler, chair of the Prize Committee, praised the laureates' contribution to economic policy discussion and public understanding.

Woodford emphasized that his theories were not motivated by political agendas but aimed to improve economic policy management and public comprehension. Created in 1968 by a donation from the Swedish central bank, the economics Nobel is the only Nobel Prize not among the original five. Last year's award went to Joel Mokyr, Philippe Aghion, and Peter Howitt for technology growth research.