Hall and Woodford win the 2026 Nobel in economics
The Swedish Academy honored them for the microeconomic foundations of the policies central banks use to smooth booms and recessions.
The Royal Swedish Academy of Sciences announced on Monday, Oct. 12, that the 2026 Nobel Prize in Economic Sciences goes to two U.S. economists: Robert E. Hall, who teaches at Stanford University, and Michael Woodford, a professor at Columbia University. The committee honors them for the "microeconomic foundations of macroeconomic stabilization," according to the Academy's press release as cited by NBC News and The Associated Press.
In plain terms, the work covers models that take the decisions of households and firms as their starting point and use them to explain and design the monetary and fiscal policy meant to ease swings in the economy. They are known as New Keynesian models and, according to Mexican daily El Financiero, central banks and finance ministries use them today.
John Hassler, chair of the prize committee, said, per AP, that thanks to the laureates "we are better equipped to deal with shocks in the economy, such as energy crises." The Academy said they have helped "smooth out the economy's peaks and troughs." Woodford, reached by phone in New York, called the award "a tremendous honor" and "a surprise."
The prize is 12 million Swedish kronor, split equally between the two economists; AP puts that at about $1.2 million. According to El Financiero, Hall was born in Palo Alto, California, in 1943 and has held a doctorate from MIT since 1967. Woodford was born in Chicopee, Massachusetts, in 1955 and earned his doctorate at the same institute in 1983.
Al Jazeera traces the origin of that work to the seventies, after the oil crises, when the Keynesian models then in use stopped working.
