On Monday, 2026-10-12, Robert Hall of Stanford University and Michael Woodford of Columbia University were awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. The award is described as the final Nobel prize of the year.
Robert Hall is 83 years old and is affiliated with Stanford University. Michael Woodford is 70 years old and is affiliated with Columbia University. Both scholars have worked on models that account for micro-level decisions by households and businesses.
Americans Hall and Woodford win Nobel economics prize for work on stabilisation https://t.co/QvDtDKMGWT #ARYNEWS
The prize carries a monetary award of 12 million Swedish crowns, which converts to approximately $1.2 million USD.
By focusing on micro‑level behavior, the models help authorities analyze shocks and stabilize economies.
The laureates’ work centers on constructing macroeconomic models that begin with the behavior of households and firms. These models are used globally by central banks and finance ministries to stabilize economies during shocks such as energy crises or changes in household consumption.
🏅 Americans Robert Hall and Michael Woodford were awarded the Nobel economics prize Monday for their work on how monetary and fiscal policy can better stabilise disruptive economic fluctuations. ➡️ https://t.co/PXXOvQx501 https://t.co/FJoN0jsVwo
By focusing on micro‑level behavior, the models help authorities analyze shocks and stabilize economies.
Michael Woodford emphasized that economic stabilization should not be seen as a mechanical exercise where policymakers simply pull levers independent of public understanding. He said, “Authorities shouldn’t view stabilisation of the economy as an exercise that is simply conducted by people pulling levers to control the economy independently of what people in the economy understand about this.”
Americans Hall and Woodford win Nobel economics prize for work on stabilisation https://t.co/DFgxpuJiL4
Woodford pointed out that the new framework proved useful during the global financial crisis of the late‑2000s. He noted that “Making more explicit statements about the likely future path of interest rate policy, as opposed to relying on simply being able to cut interest rates further immediately, that was an important part of the policy response in the years from 2009 onward.”
In discussing the crisis, Woodford also highlighted the relevance of concepts such as “sticky” inflation and the “output gap.” These concepts are part of the framework they developed.
John Hassler, Chair of the Committee for the Prize in Economic Sciences, said that the laureates’ work “better equips authorities to deal with shocks in the economy, such as energy crises or sudden changes in how much households consume.”
The models pioneered by Hall and Woodford continue to inform the toolkits of central banks and finance ministries around the world. By starting from the decisions of individuals and firms, the framework offers a way to think about policy that links micro‑level behavior to macro‑level outcomes.