American economists Robert E. Hall and Michael Woodford received the 2026 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel on 12 October 2026. The Royal Swedish Academy of Sciences awarded the prize for research on the microeconomic foundations of macroeconomic stabilisation. Hall is affiliated with Stanford University, while Woodford is affiliated with Columbia University.
Laureates and their research
Hall and Woodford developed macroeconomic models built on microeconomic foundations. These foundations examine how the decisions of individual households and businesses shape economy-wide outcomes. Their work examines how stabilisation policy affects business cycles, including fluctuations in economic activity. The prize money of 12 million Swedish kronor is shared equally between the two laureates.
Microfoundations and stabilisation policy
Microeconomic foundations connect the choices of households and firms with aggregate variables such as output, employment and prices. New Keynesian models incorporate these foundations alongside factors such as price rigidities, which can affect how quickly prices respond to economic changes. These models are used to analyse how fiscal and monetary policy can influence business cycles.
Fiscal policy refers to government decisions on taxation and public spending. Monetary policy concerns central-bank decisions affecting money, credit and interest rates. In macroeconomic analysis, policymakers use models to assess how changes in these policy instruments may affect output and inflation. Central banks and finance ministries use New Keynesian models in policy analysis.
The Economics prize and the Nobel awards
The prize’s formal name is the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Sweden’s central bank established it in 1968, and it was first awarded in 1969. It was not among the five original Nobel Prizes set out in Alfred Nobel’s 1895 will. The original prize fields were physics, chemistry, physiology or medicine, literature and peace. The Economics prize is presented on 10 December, the anniversary of Alfred Nobel’s death in 1896.
Important Facts for Exams
- The Royal Swedish Academy of Sciences awards the Economics prize.
- The Sveriges Riksbank Prize in Economic Sciences was established in 1968 and first awarded in 1969.
- The original Nobel Prizes covered physics, chemistry, physiology or medicine, literature and peace.
- Alfred Nobel’s will was signed in 1895, and he died in 1896.
Hall and Woodford’s prize-winning research concerns the microeconomic foundations of macroeconomic stabilisation. The 2026 award carried a total prize amount of 12 million Swedish kronor.
