American-born economists Robert E. Hall and Michael Woodford have been awarded the 2026 Nobel Memorial Prize in Economic Sciences for their contributions to the microeconomic foundations of macroeconomic stabilization.
The Royal Swedish Academy of Sciences announced the winners in Stockholm, recognizing their research for providing a stable theoretical foundation for models used by central banks and governments worldwide. The prize, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, carries an award of 12 million Swedish kronor (approximately $1.2 million).
Hall, affiliated with Stanford University, and Woodford, affiliated with Columbia University, were selected for their work in improving the ability to implement effective stabilization policies. According to the academy, their models help smooth out economic peaks and troughs, enabling policymakers to better respond to shocks such as energy crises or sudden changes in household consumption.
Hall, born in 1943, and Woodford, born in 1955, were notified of the award on Monday. Woodford, speaking to the committee by phone from New York, called the recognition a “tremendous honor” and a “surprise.”
The Nobel economics prize, established in 1968 by Sweden’s central bank, is presented alongside the original Nobel Prizes each year on December 10, the anniversary of Alfred Nobel’s death. While not one of the original prizes created in Nobel’s will, it is widely regarded as part of the Nobel tradition.
Last year’s economics prize honored three researchers for their work on business innovation and economic growth. This year’s announcement follows the unveiling of the Nobel Prizes in medicine, physics, chemistry, literature, and peace, all announced the previous week.
The committee emphasized that Hall and Woodford’s research has equipped policymakers with tools to reduce the economy’s volatility, particularly in managing inflation and unemployment. Their work addresses limitations exposed during the 1970s stagflation crisis, when traditional Keynesian policies failed to address simultaneous high inflation and unemployment. Their models offer a more nuanced approach to fiscal and monetary interventions, helping governments and central banks respond more effectively to economic disruptions.