Economists Robert E. Hall and Michael Woodford Win Nobel in Economics

Updated on: October 12, 2026 / 6:47 AM EDT / CBS/AP

Stockholm — Economists Robert E. Hall and Michael Woodford have been recognized with the Nobel Memorial Prize in Economics for their contributions to microeconomic foundations of macroeconomic stabilization. This award acknowledges their work in developing models that assist governments and central banks in managing economic shocks.

The Royal Swedish Academy of Sciences announced the winners in Stockholm, noting the laureates’ efforts in helping smooth out economic fluctuations. Hall, affiliated with Stanford University, is 83 years old, while Woodford, born in 1955, is associated with Columbia University.

Woodford expressed his surprise and honor over the phone from New York upon learning of the prize. “It’s a tremendous honor,” he remarked.

John Hassler, chair of the Committee for the Prize in Economic Sciences, highlighted the impact of Hall and Woodford’s work. Their research has provided a stable theoretical framework for models currently employed by central banks and governments globally, aiding in better handling economic shocks like energy crises and changes in consumer spending.

Historically, governments have managed economic disruptions by employing strategies advocated by British economist John Maynard Keynes. These involved reducing taxes and increasing government expenditure to stimulate economic activity. However, during the 1970s, the world faced “stagflation,” characterized by high inflation and unemployment, which challenged the effectiveness of these approaches.

Hall and Woodford focused on creating a more refined model, incorporating real-world decision-making by consumers and businesses regarding investments and spending. Their contributions have formed a new foundation for stabilization policy.

Last year, researchers specializing in business innovation were honored for exploring how new products drive economic growth and human welfare.

The economics prize, formally known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, was established in 1968. Although not considered a “true” Nobel Prize, it is awarded alongside others every December 10th, marking the anniversary of Alfred Nobel’s death.

This year, the Nobel prizes for medicine, physics, chemistry, literature, and peace were announced earlier. The prize amount is 12 million Swedish kronor, equivalent to about $1.2 million.