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

According to the announcement, which was issued by Sveriges Riksbank, the laureates demonstrated how economic models could be reconstructed to revitalise stabilisation policy — a shift away from approaches that relied on statistical links between macroeconomic variables such as inflation, production and consumption. Instead, they chose to build their models on a microeconomic foundation, one that encompasses an understanding of how the total mass of individual households and businesses affects the economy through their actions.

That foundation matters well beyond academic journals: models built on microeconomic underpinnings of this kind are widely used in central-bank policy analysis, where understanding how individual household and firm decisions aggregate into economy-wide outcomes such as inflation and output informs the assessment of stabilisation measures.

The prize, which was established by Sweden's central bank in 1968 in memory of Alfred Nobel — a later addition to the original prizes endowed in his will — is awarded annually by the Royal Swedish Academy of Sciences in Stockholm.

Attention now turns to the Nobel lectures and the award ceremony in Stockholm on 10 December, when the 2026 laureates formally receive their medals and diplomas.

Further details on the laureates and their contributions are available in the official Nobel Prize announcement, along with fact sheets on Robert E. Hall and Michael Woodford. The item was originally published by Econbrowser.