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It’s probably intuitive that macroeconomic forces must be derived, at least in part, from the actions of the billions of people and firms that contribute to the economy every day. But making precise links between the observed macroeconomy and the individual actions of specific agents is very difficult. Fortunately, for a huge array of practical purposes, economists are able to model and study macro-level trends like inflation without needing to know how they come about from the actions of underlying agents.But when someone does try to explain macroeconomic phenomena by building up from microeconomics, economists often call it macroeconomics with a “microeconomic foundation”. This has been a practice for decades, but it’s still an active area of research and debate, and it’s partly what earned the 2026 Economics Nobel Prize winners their award.

Economists Olivier Blanchard (MIT), Jordi Galí (CREI/CEPR/NBER), and Michael Woodford (NBER/CEPR/CESifo) have been awarded the prestigious BBVA Foundation Frontiers of Knowledge Awards in Economics, Finance, and Management for their contributions to modern macroeconomic analysis.