Nobel Prize for economics awarded to Hall and Woodford for work on ‘smoothing’ crises

US economists Robert Hall and Michael Woodford have won the 2026 Nobel economics prize for developing models that help central bankers and finance ministers stabilize economies. Their work, recognized for creating "microeconomic foundations of macroeconomic stabilisation," provides policymakers with better tools to manage economic cycles and avoid recessions and inflation. The Royal Swedish Academy of Sciences highlighted their generation of a "paradigm shift in stabilisation policy" through New Keynesian models, which are now used globally. These models improved upon earlier theories by incorporating forward-looking behavior of households and businesses. Their research also contributed to the development of forward guidance, a communication tool used by central banks.

The 2026 Nobel Prize in Economic Sciences has been awarded to US academics Robert Hall and Michael Woodford by the Royal Swedish Academy of Sciences. They are recognized for developing new macroeconomic models that enhance the implementation of effective stabilization policies. These models provide a theoretical foundation for current central bank and government strategies aimed at reducing damaging economic swings. Hall and Woodford's work, which builds on a microeconomic foundation of household and business actions, offers improved tools for managing economic shocks. Their research emerged as existing Keynesian models proved insufficient during the 1970s oil crises.

American-born economists Robert Hall and Michael Woodford have been awarded the 2026 Nobel economics prize. They are being honored for their research on how monetary and fiscal policies can stabilize economic fluctuations. Hall is affiliated with Stanford University, and Woodford is with Columbia University. The prize announcement was made in Stockholm, Sweden, recognizing their contributions to the "microeconomic foundations of macroeconomic stabilisation." Their work has reportedly helped to smooth out economic fluctuations.