2 Americans Win Nobel Prize in Economics

Two economists from Stanford and Columbia Universities shared the 2026 Nobel Memorial Prize in Economic Sciences, the Royal Swedish Academy of Sciences announced Monday.

Robert Hall of Stanford and Michael Woodford of Columbia were honored for their work in developing models to address economic fluctuations based on microeconomic variables such as individual household or business spending and saving, instead of macroeconomic trends such as inflation, production and consumption. Those models have helped governments better respond to volatile moments in the economy.

The awarding committee said Hall and Woodford’s model “revitalized” stabilization policy, a field pioneered by economist John Maynard Keynes nearly a century ago.

“A central component in these models is that households and businesses are forward looking when making decisions about savings or product prices,” a release from the awarding committee said. “When governments and central banks communicate their plans for economic policy, they can influence this view of the future and move the economy in the right direction.”

Hall said in a statement that the award was “a wonderful surprise,” and Woodford told The New York Times it was a “tremendous honor.”

In a news release from Columbia University, Woodford said that a theme of his work is that “government authorities shouldn’t view stabilization of the economy as an exercise that is simply conducted by people pulling levers to control the economy independently of what people in the economy understand about this.”

“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 awarding committee, said in the release. “With them, we are better equipped to deal with shocks in the economy, such as energy crises or sudden changes in how much households consume.”