Hall and Woodford win 2026 Nobel economics prize for work on stabilisation policy

Mixed · 2The Royal Swedish Academy of Sciences announced in Stockholm on 12 October 2026 that Robert E. Hall and Michael Woodford had won the Nobel memorial prize in economics "for microeconomic foundations of macroeconomic stabilisation". 1 2 Left · 2Hall is affiliated with Stanford University in California and Woodford with Columbia University in New York. 3 4 Left · 2The Academy said the pair developed new macroeconomic models that improved the ability to carry out stabilisation policy, so that well-timed fiscal and monetary measures can reduce the economy's peaks and troughs. 3 4

Mixed · 2John Hassler, chair of the Committee for the Prize in Economic Sciences, said the work gave a stable theoretical foundation for models now used by central banks and governments, leaving them better equipped for shocks such as energy crises or sudden changes in household consumption. 1 5 Left · 2Timo Boppart of the prize committee said governments long followed Keynes's prescription of lower taxes and higher spending in a downturn: "This is the Keynesian recipe and it worked well – until it didn't." The 1970s "stagflation", with high inflation and high unemployment together, showed the older tradeoffs were too simple, and Hall and Woodford, in separate contributions, set out to improve the model by reflecting how households and businesses actually decide whether to spend and invest. 6 7 Left · 1The committee said that basing models on millions of micro-level decisions, rather than a bird's-eye macro view, "has generated a paradigm shift in the theory of stabilization policy"; Woodford added that a goal was a framework that lets governments explain their actions to the public. 6

Left · 1CBS News reported that Woodford spoke to the committee by phone from New York, calling the prize "a tremendous honor, it's a surprise." 3 Mixed · 2The prize is worth 12 million Swedish crowns, about $1.2 million according to Reuters and DW; it is the last of this year's Nobel announcements, after medicine, physics, chemistry, literature and peace the previous week. 1 2 Mixed · 2The economics prize, first awarded in 1969, was not among the five prizes in Alfred Nobel's 1895 will but was established by Sweden's central bank; some purists say it is technically not a Nobel Prize, though it is presented with the others on 10 December. 1 5

Mixed · 2Outlets differ on the prize's start date: most give 1968 for its founding by the central bank, while others date the first award to 1969, a discrepancy IJR flagged. 6 8 Right · 1Reuters noted that most previous laureates have been from the United States and that only three women have won, most recently Claudia Goldin in 2023; last year's prize went to Joel Mokyr, Philippe Aghion and Peter Howitt for work on innovation-driven growth. 1 Centre · 1Hindustan Times reported, citing Reuters, that a Clarivate analysis had pointed to monetary policy, the economics of information technology and evolutionary economic theory as likely areas for the 2026 prize. 9