Economics Nobel 2026 to Robert Hall and Michael Woodford for stabilisation’s micro-foundations
Open in the app — quiz, notes, Mistake Vault हिंदी में पढ़ें
The news
Stockholm. On October 12 the Royal Swedish Academy of Sciences awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2026 to Robert E. Hall (Stanford University) and Michael Woodford (Columbia University) “for microeconomic foundations of macroeconomic stabilisation”. They share 12 million Swedish kronor, about ₹12 crore. Micro-foundations means building models of the whole economy from how households and firms actually decide. Hall showed that a household’s spending depends almost as much on what it expects to earn as on what it earns now (The Hindu), though families living hand to mouth cannot plan this way (The Indian Express). Woodford showed that firms set prices looking ahead, so expectations of future interest rates shape inflation. The models are “now used by central banks and governments around the world”, said John Hassler, chair of the prize committee.
Prelims nuggets
- The Economics prize is formally the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, instituted by Sweden’s central bank in 1968 and first awarded in 1969.
- It is awarded by the Royal Swedish Academy of Sciences, which also awards the Physics and Chemistry prizes.
- Forward guidance is a central bank’s public communication of its likely future policy path, used to steer expectations.