Robert Hall and Michael Woodford Share 2026 Nobel in Economics for Macro Stabilisation Models

The Royal Swedish Academy of Sciences awarded the 2026 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Robert E. Hall and Michael Woodford on Monday. The citation recognises their work on the microeconomic foundations of macroeconomic stabilisation. The prize is worth 12 million Swedish kronor, shared between them.

Hall is at Stanford University. Woodford is at Columbia University. Their research developed New Keynesian models that start from the decisions of households and firms and show how monetary and fiscal policy can smooth business cycles. Central banks and finance ministries now use versions of these models. The Academy said the work produced a paradigm shift in stabilisation policy and proved useful during recent energy crises and the pandemic.

Woodford spoke by phone from New York after the announcement. He called the award a tremendous honour and a surprise. Hall has not yet issued a public statement. Princeton, where Woodford once taught, and the University of Chicago, where he earned his undergraduate degree, both noted the award. Woodford is a former faculty member at both institutions.

The models trace how expectations of future income and policy shape current spending. They give policymakers a clearer account of how interest rate changes and fiscal measures transmit through the economy. The Academy said the framework allows quantification of effects that earlier approaches left less precise.

This is the 58th Nobel in economics. The prize is funded by the Swedish central bank and administered by the Academy. The announcement followed the literature, peace, medicine, physics, and chemistry prizes earlier in the week. Hall and Woodford join a list of economists whose work has shaped how governments respond to inflation, recessions, and supply shocks.

Neither laureate has published a detailed reaction beyond Woodford’s brief call. Their papers on consumption dynamics and monetary policy rules remain standard references in central bank research departments.