US economists Robert Hall and Michael Woodford won the 2026 Nobel prize in economics on Monday “for microeconomic foundations of macroeconomic stabilisation”, the Royal Swedish Academy of Sciences said, Reuters reported.
The two developed new macroeconomic models that improved the ability to carry out effective stabilisation policy, allowing well-timed fiscal and monetary measures that can reduce damaging swings in the economy, the academy said.
John Hassler, chair of the Committee for the Prize in Economic Sciences, said their work had given a stable theoretical foundation to the models now used by central banks and governments around the world.
“With them, we are better equipped to deal with shocks in the economy,” he said, citing energy crises and sudden changes in household consumption as examples.
The prize, formally the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is worth 12 million Swedish crowns (1.2 million dollars) and is the last of this year’s Nobel awards. The prizes for medicine, physics, chemistry, literature and peace were announced last week.
First awarded in 1969, the economics prize was not one of the five original awards set out in the 1895 will of industrialist and dynamite inventor Alfred Nobel, but was established by Sweden’s central bank.
Most previous laureates have been from the United States. Only three women have won, most recently Claudia Goldin in 2023 for work on how gender has affected pay and employment over time in the United States.
Analysis by the Institute for Scientific Information, part of Clarivate, had tipped researchers working on monetary policy, the economics of information technology and evolutionary economic theory as possible winners.
Last year’s prize went to Joel Mokyr, Philippe Aghion and Peter Howitt for work on ‘creative destruction’ and how new technology and production methods can boost growth and living standards.
(Reuters)
