Hall, Woodford share 2026 Economics Nobel for stabilisation research

STOCKHOLM: American economists Robert E. Hall, 83, and Michael Woodford, 71, have been awarded the 2026 Nobel Prize in Economic Sciences for their work on the microeconomic foundations of macroeconomic stabilisation. The prize, worth 12 million Swedish kronor (approximately Rs 11.51 crore), will be shared equally between the two laureates.

Hall is a professor emeritus of economics at Stanford University in California, while Woodford is the John Bates Clark Professor of Political Economy at Columbia University in New York. Their research laid the foundations for New Keynesian macroeconomic models, which help governments and central banks formulate policies to stabilise the economy. These models explain how decisions made by households and businesses, along with their expectations about future economic conditions, influence the economy as a whole.

Hall's work highlighted the importance of households' expectations about future income and consumption in understanding economic fluctuations. Woodford developed a framework explaining how monetary policy, interest rates and central bank communication influence economic activity and inflation.

The Royal Swedish Academy of Sciences said their work had significantly improved the ability of policymakers to implement effective stabilisation policies. Well-timed fiscal and monetary measures based on these models can help moderate economic fluctuations.