Nobel Economics Prize 2026 Awarded to Robert Hall and Michael Woodford

On 12 October 2026, the Royal Swedish Academy of Sciences announced that the Nobel Prize in Economic Sciences – the last of the year’s Nobel awards – would be shared by two American economists, Robert Hall and Michael Woodford.

Hall and Woodford are being honoured for creating a new generation of macro‑economic models that give policymakers a firmer footing when trying to smooth out the inevitable ups and downs of an economy. Their work, the academy said, is now the backbone of the tools used by central banks and finance ministries around the globe.

"The laureates' research provides a stable theoretical foundation for the models that are now used by central banks and governments worldwide," said John Hassler, chair of the Committee for the Prize in Economic Sciences. "With them, we are better equipped to deal with shocks – whether it’s an oil crisis, a sudden swing in consumer spending, or an unexpected energy price spike."

The story goes back to the turbulence of the 1970s, when the classic Keynesian frameworks started to break down under the weight of oil‑price shocks and stagflation. Hall and Woodford went back to basics, building models on a micro‑economic foundation that tracks how individual households and firms behave, rather than relying purely on statistical correlations between aggregate variables.

That shift proved decisive. By embedding the decision‑making processes of countless agents into their equations, the new models could more accurately predict how fiscal stimulus or interest‑rate adjustments would ripple through the economy. In practice, this means governments can fine‑tune policies to dampen recessions without over‑correcting, and central banks can steer inflation with a clearer sense of cause and effect.

The Nobel economics prize, first awarded in 1969, is not one of Alfred Nobel’s original five awards but was established by Sweden’s central bank. While most laureates have hailed from the United States, only three women have ever won, the most recent being Claudia Goldin in 2023 for her research on gender gaps in pay and employment.

Like all Nobel prizes, the award comes with a gold medal, a diploma and a cash prize of roughly $1.2 million. The ceremony in Stockholm will see Hall and Woodford join a distinguished roster of past winners, from the likes of Paul Samuelson to the recent laureates Joel Mokyr, Philippe Aghion and Peter Howitt, who were honoured for their work on creative destruction and technological progress.