Tashkent, Uzbekistan (UzDaily.uz) — American economists Robert E. Hall of Stanford University and Michael Woodford of Columbia University have been awarded the 2026 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. The Royal Swedish Academy of Sciences honoured them for their work on “the microeconomic foundations of macroeconomic stabilisation”.
Their research has contributed to the development of macroeconomic models that assess how decisions made by individual households and companies affect the economy as a whole. These models help analyse how timely fiscal and monetary policy measures can soften economic downturns and curb excessive growth.
Economies develop in cycles, alternating between periods of expansion and contraction. During recessions, governments can stimulate economic activity by lowering interest rates and increasing budget deficits. Conversely, when the economy grows too rapidly, policymakers introduce measures to restrain activity.
In the 1970s, oil crises, high inflation and unemployment challenged the effectiveness of several traditional Keynesian models. Against this backdrop, Hall and Woodford contributed to the development of an approach based on microeconomic principles that takes the behaviour of market participants into account.
A key feature of these models is that households and companies make decisions based on their expectations of the future. Individuals assess prospects when choosing between consumption and saving, while companies consider future conditions when setting prices. As a result, announcements by governments and central banks about planned economic policy measures can influence market participants’ expectations and decisions.
According to Jon Hasler, chair of the Committee for the Prize in Economic Sciences, the laureates’ research established a theoretical foundation for models used by central banks and governments around the world. These models help assess the potential consequences of economic shocks, including energy crises and sharp changes in consumer spending.
Robert E. Hall was born in 1943 in Palo Alto, California. He received his PhD from the Massachusetts Institute of Technology in 1967 and is a professor at Stanford University.
Michael Woodford was born in 1955 in Chicopee, Massachusetts. He received his PhD from the Massachusetts Institute of Technology in 1983 and is currently a professor at Columbia University in New York.
The prize is worth 12 million Swedish kronor, which will be divided equally between the two laureates, according to the announcement.
Founded in 1739, the Royal Swedish Academy of Sciences is an independent organisation that promotes the advancement of science and strengthens its role in society, with particular emphasis on the natural sciences and mathematics.
