American economists Robert E. Hall and Michael Woodford have won the 2026 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. The Royal Swedish Academy of Sciences awarded them the prize “for the microeconomic foundations of macroeconomic stabilization“.
The prize is worth 12 million Swedish kronor, which will be divided equally between the two laureates. It is officially known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.
Models of Response to Economic Shocks
Hall and Woodford have developed macroeconomic models based on the decisions of individual households and firms. This approach allows us to trace how consumption, savings, investment and pricing affect inflation, employment and economic growth.
Their research is used by central banks and governments, which use interest rates, budget spending and tax policy to limit economic fluctuations. The models are designed to take into account the expectations of households and businesses for future development.
“The work of the laureates has given us a solid theoretical foundation for the models that are used today by central banks and governments around the world“, said John Hasler, chairman of the prize committee.He said the developments help in responding to shocks such as energy crises and sudden changes in consumption.
Who are the two laureates?
Robert E. Hall is a professor at Stanford University in California. He was born in 1943 in Palo Alto and received his doctorate from the Massachusetts Institute of Technology in 1967. His research focuses on macroeconomics, labor markets, inflation, economic growth, and public policy.
Michael Woodford is a professor of political economy at Columbia University in New York. He was born in 1955 in Chicopee, Massachusetts, and received his doctorate in economics from the Massachusetts Institute of Technology in 1983. He is a leading researcher on monetary policy and the way central bank decisions affect inflation and economic activity.
The Prize in Economic Sciences was established by the Swedish Central Bank in 1968 and was first awarded in 1969. It is not one of the five prizes provided for in Alfred Nobel's will. The award ceremony will take place on December 10 in Stockholm.
Sources: dariknews.bg, apnews.com, hotnews.ro