Morning Edition · Tue 13 Oct 2026
Hall and Woodford Win Nobel Economics Prize for Foundations of Stabilisation Policy
American economists Robert E. Hall and Michael Woodford won the Nobel Memorial Prize in economics on Monday for models that help governments and central banks steady economies after shocks such as energy crises and inflation.
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A paradigm shift in stabilisation policy
The Royal Swedish Academy of Sciences announced the award in Stockholm on Monday, October 12, the Associated Press reported via PBS. Hall is affiliated with Stanford University and Woodford with Columbia University.
“The laureates' research has made it possible to manage major macroeconomic crises far more effectively than before,” the Nobel committee wrote, according to AP. “It has been hugely beneficial during the pandemic and the energy crises of recent years.” The committee said their work “generated a paradigm shift in the theory of stabilization policy.”
Households and firms look ahead
Hall studied how consumers' spending depends on their expectations of future income. In a 1982 paper with Fredric Mishkin he found that around 80% of households based spending on expectations for the future “while the rest lived hand to mouth,” the committee wrote, according to AP.
Woodford showed that businesses set prices based on where they expect interest rates and costs to go, implying that central banks should provide “clear and credible communication about how they reason and what they plan to do,” AP reported.
The prize
The prize is worth 12 million Swedish kronor, about $1.2 million, AP reported. “It's a tremendous honor. It's a surprise,” Woodford told the committee by phone from New York.