Two American academics, Robert Hall and Michael Woodford, have won the 2026 Nobel Prize in Economic Sciences for research that reshaped how governments and central banks try to calm a lurching economy. The Royal Swedish Academy of Sciences announced the award on Monday in Stockholm, closing out this year’s Nobel season.
The laureates were honoured for work on how monetary and fiscal policy can help stabilise fluctuations in the economy. Their macroeconomic models, the academy said, give officials a better footing when designing stabilisation measures that soften damaging swings in output, prices and demand.
“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,” said John Hassler, chair of the Committee for the Prize in Economic Sciences.
“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.”
Hall and Woodford set about building new tools after the oil crises of the 1970s exposed the limits of the Keynesian models that had long guided decisions on when and how to respond to recessions and other economic fluctuations. Those older frameworks, the academy noted, stopped working.
Instead of grounding their models in statistical links between macroeconomic variables such as inflation, production and consumption, the two economists built them on a microeconomic foundation. That approach accounts for the way the combined actions of individual households and businesses shape the economy as a whole.
The economics prize is formally called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Sweden’s central bank established it rather than the 1895 will of industrialist and dynamite inventor Alfred Nobel, which created the five original awards, and it was first handed out in 1969.
Most laureates over the decades have come from the United States. Only three women have ever won, most recently Claudia Goldin in 2023 for her research into how gender has affected pay and employment in the US over time.
Last year’s winners were Joel Mokyr, Philippe Aghion and Peter Howitt, recognised for their work on “creative destruction” and how new technology and production methods can lift growth and living standards.
Like the other Nobel awards, the economics prize brings a diploma, a gold medal and a cheque for $1.2m.
The medicine, physics, chemistry, literature and peace prizes were announced last week, with South African jurist Navi Pillay and Canadian writer Anne Carson among the winners.
The economics award was the final one revealed this year, following last week’s announcements in the other five categories.
