The 2026 Nobel Memorial Prize in Economic Sciences has been awarded jointly to American economists Robert E. Hall and Michael Woodford for their work on the "microeconomic foundations of macroeconomic stabilisation."

Their research updated classic Keynesian models by incorporating consumer expectations and individual household behaviour, giving governments and central banks potentially better tools to manage economic shocks like inflation spikes or energy crises.

Robert E. Hall

• Current Affiliation: Stanford University and the Hoover Institution.
• Background: Born in Palo Alto, California (currently 83 years old). He graduated from UC Berkeley in 1964 before later earning his Ph.D. from MIT.
• Focus: Hall is an applied economist who studies employment, inflation, technology, and competition. His work has heavily influenced how economists understand labor markets, unemployment fluctuations, and consumer spending habits during recessions.

Michael Woodford

• Current Affiliation: Columbia University (John Bates Clark Professor of Political Economy).
• Background: Born in 1955 in Chicopee, Massachusetts. He previously taught at Princeton University and has been a visiting scholar at UC Berkeley.
• Focus: Woodford is widely considered one of the most prominent architects of New Keynesian economics. He is best known for his work on modern monetary theory and "forward guidance"—the concept that central banks can stabilize the economy just as much by communicating their future intentions (and thereby shaping public expectations) as they can by actively changing interest rates.

Why Their Work Won

Following the 1970s oil shocks, older macroeconomic models struggled to predict economic behaviour because they relied heavily on top-down statistical aggregates.

Hall and Woodford showed that macroeconomic models must be built from the bottom up—based on how individual consumers and businesses actually behave.

The Nobel committee highlighted that this "micro-founded" approach allows policymakers to see how future expectations (e.g., consumers anticipating a recession and cutting back on spending) directly drive the broader economy, which proved crucial for managing recent global crises like the pandemic and energy shortages.