Robert Hall and Michael Woodford won the 2026 Nobel Prize in Economics.
They developed advanced economic models for managing financial crises.
Central banks globally use their research for stabilisation policies.
Robert E. Hall and Michael Woodford have won the Nobel Prize in Economics, 2026, for their work on the “microeconomic foundations of macroeconomic stabilisation,” the Royal Swedish Academy of Sciences announced on Monday.
Hall is associated with Stanford University in California, and Woodford with Columbia University in New York. The recipients will receive a 12 million Swedish kronor ($1.2 million) cash prize.
Earlier, the Nobel Prize in Economics was known as the Sveriges Riksbank Prize in Economic Sciences, and it is given in Memory of Alfred Nobel.
Hall and Woodford created new macroeconomic models that improved our ability to implement effective stabilisation policies. This model also enabled well-timed fiscal and monetary policy measures that can reduce the intensity of damaging swings in the economy, according to Reuters.
Central banks and finance ministries across the world now use these models today. The Nobel committee highlighted that their work helped officials manage major economic crises much better than in the past.
John Hassler, chair of the Committee for the Prize in Economic Sciences, said in a statement, “The laureates’ work has provided us with a stable theoretical foundation for the models that are now used by central banks and governments around the world.”
He further added, “With them, we are better equipped to deal with shocks in the economy, such as energy crises or sudden changes in how much households consume.”
Last year the award was given to Joel Mokyr, Philippe Aghion and Peter Howitt l for their work on "creative destruction" and how growth and living standards can be boosted by new technology and production methods.
The economics prize was not part of the original five awards created in 1895 by the dynamite inventor Alfred Nobel. Instead, it was established in 1969 by Sweden's central bank.
Most past winners have been from the United States. Only three women have ever won the prize, with Claudia Goldin being the most recent in 2023 for her research on how gender has impacted pay and employment over time in the US.
