Ellen Moons, Secretary-General of the Royal Swedish Academy of Sciences (centre), Prize Committee Chair John Hassler (left), and Prize Committee member and expert Timo Boppert announced on October 12, 2026, American economists Robert E. Hall and Michael Woodford as the winners of the 2026 Sveriges Riksbank Prize in Economic Sciences in memory of Alfred Nobel.
Jonathan Knackstrand | AFP | Getty Images
Robert E. Hall and Michael Woodford were awarded the Nobel Prize in Economics on Monday for their work supporting models used by central banks and governments to “smooth out” periods of boom and bust.
The U.S.-born duo jointly received the award for their contributions to the “microeconomic infrastructure” that contributes to macroeconomic stability.
The Sveriges Riksbank Prize was established in 1968 by the Sveriges Riksbank in memory of Alfred Nobel. The winners will share a prize of 12 million Swedish kronor ($1.2 million).
Mr. Hall, born in California, is a professor at Stanford University, and Mr. Woodford, born in Massachusetts, is a professor at Columbia University.
“Thanks to them, we are now better prepared to deal with economic shocks, such as energy crises or sudden changes in household consumption,” John Hassler, chair of the Economic Sciences Prize Committee, said in a statement.
Rethinking the economic model
During the stagflation oil crisis of the 1970s, the widely accepted Keynesian model, which prescribed lower interest rates and higher government deficits to deal with recessions, appears to be “no longer working”, the Royal Swedish Academy of Sciences has said.
To fuel these models, the economists’ individual studies looked beyond macroeconomic variables such as inflation, production and consumption to show how individual households and businesses collectively shape the economy through decisions based on expectations for the future, the academy said.
Their research shows the importance of central banks and governments communicating their policy plans, which can “influence this view of the future and steer the economy in the right direction,” the report said.
“Fiscal and monetary policies based on these models and at the right time can ease the peaks and troughs in the economy,” the academy added.
“Since the introduction of the new model, it has greatly helped us cope with the economic downturn that has affected our company.”
The Memorial Prize in Economics is the last award to be announced, following the original Physiology/Medicine Prize, Physics, Chemistry, Literature, and Peace Prize.
This year’s winners include Navanesem “Navi” Pillay, who won the Nobel Peace Prize on Friday for her work promoting peace and international law, and Canadian poet and author Anne Carson, who won the literary award for her “bold and original work.”
