Two United States-based economists, Robert Hall of Stanford University and Michael Woodford of Columbia University, have been awarded the 2026 Nobel Prize in economics for work that has reshaped how policymakers respond to economic shocks.
Their research, described by the prize committee as establishing the “microeconomic foundations of macroeconomic stabilisation,” produced formal models that link individual behaviour and market frictions to aggregate outcomes. Those frameworks have become central to how central banks and finance ministries think about policy choices aimed at stabilising output and prices.
Practical use of the models has helped authorities design interventions intended to smooth the peaks and troughs of economic cycles, reducing the likelihood of protracted recessions and runaway inflation. By clarifying the channels through which monetary and fiscal measures affect households and firms, the work provides a more systematic basis for deciding when and how aggressively to act.
Both laureates are long-standing figures in US academic economics: Hall is based at Stanford University in California and Woodford at Columbia University in New York. Their contributions have influenced a generation of research and policy analysis on macroeconomic management, reinforcing the connection between detailed microeconomic assumptions and the design of stabilisation policy.