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2026 Nobel Prize in Economics Awarded to Robert E. Hall and Michael Woodford

12 October, 2026

The Royal Swedish Academy of Sciences has awarded the 2026 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Robert E. Hall of Stanford University and Michael Woodford of Columbia University for their contributions to the “microeconomic foundations of macroeconomic stabilisation.”

This year's Nobel Prize recognises groundbreaking contributions to modern macroeconomics. Both economists have played a major role in developing theoretical models that explain how the decisions of households and firms affect the economy as a whole. Their research has helped establish a stronger scientific foundation for economic policies aimed at mitigating economic fluctuations.

According to the Royal Swedish Academy of Sciences, the laureates' work has significantly advanced our understanding of how monetary and fiscal policies can contribute to economic stabilisation. By deepening our understanding of the mechanisms that influence consumption, employment, prices, and economic expectations, their research has provided economists and policymakers with more precise tools for analysing economic shocks and designing effective policy responses.

Robert E. Hall has focused his research primarily on household consumption behaviour, labour markets, and business cycles. His work has helped explain how households adjust their spending over time and how labour market dynamics contribute to fluctuations in economic activity.

Michael Woodford has made fundamental contributions to the development of modern monetary theory. His research has focused particularly on how interest rates and the expectations of households and firms influence inflation and economic activity. His work has provided the theoretical foundations for monetary policy approaches used by central banks to maintain price stability and respond to economic downturns.

Ill. Niklas Elmehed © Nobel Prize Outreach

The research of both laureates demonstrates why understanding the decisions of individual households and firms is essential for explaining how the economy as a whole functions. Their work also helps identify the conditions under which well-timed monetary and fiscal policy measures can mitigate business cycle fluctuations, thereby reducing the impact of economic crises on households and businesses.

Commenting on the significance of this year's award, Marek Kapička, Director of CERGE-EI, explains: “Bob Hall and Michael Woodford have fundamentally shaped our thinking about fiscal and monetary policy. Thanks in part to their contributions, macroeconomics has evolved from outdated Keynesian models into a modern science that approaches stabilisation policy within a consistent dynamic framework built on microeconomic foundations. Today, virtually all central banks use this framework in their analyses.”

This year's Nobel Prize also highlights the crucial role of macroeconomic research at a time when governments and central banks face challenges related to inflation, economic uncertainty, and the impact of global shocks on employment, investment, and economic growth. Understanding how households and firms respond to changes in economic policy, prices, and expectations is essential for designing effective and credible stabilisation measures.

“People's expectations about the future direction of economic policy play a crucial role and often limit policymakers' ability to influence the economy even today. For example, if people expect that the government will be unwilling to reduce its fiscal deficit in the future, this may lead to higher inflation in the present,” Kapička explains.

“This award comes as no surprise to the economics community and has been anticipated for some time, particularly in Woodford's case. The contributions of both laureates are truly fundamental and far-reaching,” Kapička adds. “From an economic policy perspective, I would highlight one key theme running through their work: the close interconnection between fiscal and monetary policy, and the fact that the two cannot be considered separately when it comes to macroeconomic stabilisation, including, for example, controlling inflation.”

Michal Kejak, CERGE-EI Deputy Director for Research, recalls his personal experience working with Michael Woodford during a sabbatical stay at Columbia University in autumn 2019, when he consulted Woodford on his research into endogenous credit cycles:

“I was particularly impressed by his openness and willingness to engage in discussion. I was also struck by how quickly he got to the heart of the problem. Our conversation soon moved beyond words – within moments, we were standing at the blackboard, writing equations and discussing them together. That kind of personal encounter with an exceptional economist is an experience I will never forget.”

Michael Woodford also visited CERGE-EI in June 2012 to participate in the international conference Rational Inattention and Related Theories, where he presented his research on Inattentive Valuation and Reference-Dependent Choice. The conference also brought together leading economists, including the late Christopher Sims, the 2011 Nobel laureate in Economics, and CERGE-EI researchers Filip Matějka and Jakub Steiner.

As Sergey Slobodyan (CERGE-EI) puts it: “Michael Woodford is a towering figure that is essentially synonymous with modern monetary macroeconomics and monetary policymaking. There is no central banker in the world who would not know his papers laying down foundations of New Keynesian macroeconomics, conduct of monetary policy in these models, and analysis of the way central bank communication shapes expectations of economic agents.”

“Robert Hall is cited for his contribution to constructing properly theoretically grounded New Keynesian models, in particular the models with sticky wages. No estimated model these days would operate without this mechanism,” adds Sergey Slobodyan whose research on DSGE models and adaptive learning builds on the modern macroeconomic framework to which the Nobel laureates, particularly Michael Woodford, have made fundamental contributions.

CERGE-EI and Nobel Laureates in Economics

CERGE-EI has long maintained close ties with the international community of Nobel laureates in economics. Most recently, Philippe Aghion, one of the 2025 Nobel Prize recipients, is a member of CERGE-EI's Executive and Supervisory Committee (ESC). In May 2026, he returned to Prague to deliver a public lecture on creative destruction as part of CERGE-EI's 35th anniversary celebrations.

Other Nobel laureates associated with CERGE-EI include Joseph Stiglitz (2001), a member of its Executive and Supervisory Committee (ESC), and the late Christopher Sims (2011), who is recognized as an honorary member of the committee in memoriam. Paul Milgrom, awarded the Nobel Prize in 2020, also served on the committee from 2015 to 2020. Over the years, CERGE-EI has welcomed numerous Nobel laureates for lectures, academic discussions, and exchanges with students and researchers.

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel was established in 1968 and has been awarded annually since 1969 to researchers whose work has significantly advanced the field of economics.