Fight against crisis and inflation: Nobel Prize awarded to two economists
In 2026, the Nobel Prize in Economic Sciences was awarded to American scientists Robert Hall and Michael Woodford "for developing the microeconomic foundations of macroeconomic stabilization," the Nobel Committee reported.
Fighting crisis and inflation: Nobel Prize awarded to two economists
Robert Hall of Stanford University and Michael Woodford of Columbia University have developed macroeconomic models that serve to conduct economic policy more effectively.
Their research explains how decisions made by individual households and companies affect the economy as a whole. How the population and businesses assess the future is also important: for example, whether or not they change their plans based on expected decisions by the government and the Central Bank.
These models help governments choose the most optimal measures to stabilize the economy. During periods of crisis and downturn, lowering interest rates and increasing budget expenditures can support business activity. When the economy is "overheating," measures are directed at curbing excess demand and inflation.
In the 1970s, traditional economic models faced serious challenges: countries experienced a period of low economic growth, high unemployment, and high inflation. Previous approaches to economic stabilization proved not to always yield the expected results.
Hall and Woodford proposed building models on a microeconomic foundation — taking into account how individuals and companies make decisions regarding consumption, savings, and pricing.
Such an approach paved the way for improving the theoretical framework of economic policy. The scientists' research developments are widely used in creating models that help governments and central banks respond appropriately to economic shocks, including energy crises and sharp shifts in consumer demand.