Robert E. Hall and Michael Woodford have been awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2026 for their contributions to the microeconomic foundations of macroeconomic stabilization.

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The Royal Swedish Academy of Sciences has awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2026 to Robert E. Hall from Stanford University and Michael Woodford from Columbia University for their groundbreaking work in the field of macroeconomic stabilization.

This year’s prize recognizes their development of new macroeconomic models that significantly enhance the ability to implement effective stabilization policy, smoothing out the peaks and troughs characterizing the economy.

Historically, stabilisation policy has been crucial in managing economic fluctuations, a concept introduced by economist John Maynard Keynes nearly a century ago. For many years, governments and central banks have employed these policies to combat downturns and control inflation during boom times. However, Keynesian models faltered during the oil crises of the 1970s, leading to stagnant growth and high unemployment.

Hall and Woodford's contributions focus on reconstructing economic models with microeconomic foundations rather than mere statistical correlations among broader economic indicators. Their approach includes understanding how individual choices of households and businesses impact the macro economy, emphasizing forward-looking decision-making.

John Hassler, Chair of the Prize Committee, noted that the laureates’ work has laid a stable theoretical groundwork that is now utilized by governments and central banks worldwide, equipping them to respond more effectively to economic shocks and fluctuations.

The total prize amount is 12 million Swedish kronor (approx. €1.08m / US$1.2m), to be shared equally between the two laureates. 

The award highlights the ongoing importance of robust economic theories in shaping effective policy responses to modern-day economic challenges.

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Read the full press release at: nobelprize.org

Watch the prize announcement and an interview with a member of the prize committee here.

Read more about Robert E. Hall on his Stanford Profile.

Read more about Michael Woodford on his Columbia Profile.