Accessibility helpSkip to navigationSkip to main contentSkip to footer Move from the headline to the deeper picture with a discounted annual subscription. Move from the headline to the deeper picture with a discounted annual subscription. Nobel Prize for economics awarded to Robert E Hall and Michael Woodford The American economists Robert E Hall and Michael Woodford have won the 2026 Nobel Prize for Economics for their work on “smoothing out” economic cycles.
Hall, born in 1943 in Palo Alto, is a professor at Stanford University, while Woodford, born in 1955 in Chicopee, is a professor at Columbia University. Their work has “helped us smooth out the economy’s peaks and troughs”, the committee awarding the prize said, adding that their work had “significantly improved” policymakers’ ability to implement well-timed fiscal and monetary measures. The models developed by Hall to explain households’ consumption decisions, and by Woodford to explain businesses’ price-setting decisions, filled a gap that opened up after the oil crises of the 1970s, when the previous Keynesian models had apparently broken down.
A decade of low growth, high unemployment and high inflation had led many people to believe that governments’ efforts to stabilise the economy had done more harm than good. The previous framework “was too much of a black box”, the committee said, and Hall and Woodford helped “to build a new framework from the ground up”. Calling in to the presentation ceremony, Woodford said his work aimed to make clear that policy should not simply be about “pulling levers to control the economy” but should allow governments “to talk to the public about what they are doing”.
The prize — formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel — is awarded by the Royal Swedish Academy of Sciences in Stockholm. It was established in 1968 and brings an award of 12mn Swedish kronor (around £900,000) to be split between the winners. The youngest laureate so far is Esther Duflo, who won the prize aged 46, while the oldest is Leonard Hurwicz, recognised at the age of 90.
Tomi Boppart, a professor at Stockholm University and one of the judges for the prize, said: “Robert Hall worked on the demand side, studying consumption, whereas Michael Woodford studied the supply side, the price-setting behaviour of firms, and put all the pieces together in a whole.” Economists can be just as petty as the rest of us, and are probably even more prone to festering internecine feuds driven by tiny interpretational differences, imagined slights and ancient scholastic grudges. However, Alphaville has now spent some time looking at the online discourse, and most economists seem happy that Michael Woodford and Robert Hall have won this year’s Nobel gong. Sure, there are the odd grouches that this represents yet another win for macroeconomists while other fields get ignored, complaints about the resilience of DSGE models and acerbic takes on forward guidance (a Woodfordism).
The pair seems an odd mix to some. But the general view is that this is a deserved win. > This one makes me incredibly happy. https://t.co/L5qrv43HaM Even before the winner was announced, the University of Liverpool’s Costas Milas (an occasional AV contributor) emailed to argue that Woodford would be a worthy pick: > His research work on Monetary economics has influenced scholars throughout the recent and less recent period. In particular, his book Interest and Prices has always been a must in the bookshelves of every economist.
Extract — continue reading at the source.
