- Their work aids governments designing effective fiscal and monetary policies.
US economists Robert Hall and Michael Woodford have won the 2026 Nobel economics prize for their work on the microeconomic foundations of macroeconomic stabilisation, the Royal Swedish Academy of Sciences announced on Monday. The economists were recognised for developing models that help governments and central banks design effective fiscal and monetary policies to limit economic volatility. The prestigious award, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is worth 12 million Swedish kronor, or approximately $1.2 million.
Why They Won
The laureates developed macroeconomic models that improved economists’ understanding of how stabilisation policies can be implemented effectively. Their research has helped establish a theoretical foundation for measures designed to reduce the severity of economic fluctuations.
According to the prize committee, their work enables policymakers to better time fiscal and monetary interventions, helping economies respond to disruptive developments and avoid deeper downturns.
“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,” John Hassler, chair of the Committee for the Prize in Economic Sciences, said in a statement.
He added that their contributions had strengthened policymakers’ ability to respond to economic shocks, including energy crises and sudden changes in household consumption.
Fiscal policy involves government decisions on taxation and public spending, while monetary policy generally concerns central bank decisions on interest rates and the money supply. Both can influence economic activity, inflation and employment.
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About The Prize
First awarded in 1969, the economics prize differs from the original five Nobel awards established under Alfred Nobel’s 1895 will. It was created by Sweden’s central bank, Sveriges Riksbank, in memory of Nobel and is formally administered as a separate economics award.
Most previous recipients have been from the United States, while women remain significantly underrepresented among laureates. Only three women have won the prize, with Claudia Goldin receiving it in 2023 for research examining gender differences in labour market outcomes and earnings over time in the US.
Previous Winners
Ahead of Monday’s announcement, analysis by the Institute for Scientific Information, part of Clarivate, had identified monetary policy, information technology economics and evolutionary economic theory as potential areas for recognition.
Last year, Joel Mokyr, Philippe Aghion and Peter Howitt received the award for their work on “creative destruction” and how technological innovation and new production methods can drive economic growth and improve living standards.
The 2026 award concludes this year’s Nobel announcements, recognising research aimed at improving the understanding of economic fluctuations and the policies used to manage them.
Also Read: 2026 Nobel Prize In Chemistry: Henri Kagan, Kenso Soai Win For Work On Chiral Molecules
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