Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2026
On Monday, 12 October 2026, the Royal Swedish Academy of Sciences announced to award the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2026 jointly to Robert E. Hall and Michael Woodford “for having identified the prerequisites for sustained growth through technological progress”.
“The economy is characterised by alternating downturns and upturns. Ever since the economist John Maynard Keynes launched his theories almost a century ago, stabilisation policy has been important for tackling these fluctuations. During recessions, the economy is boosted by reducing interest rates and increasing the budget deficit, while the opposite should be done to slow a booming economy.
However, during the oil crises of the 1970s, it seemed that the Keynesian models that govern when and how measures should be implemented no longer worked. They did not reduce unemployment, but led to uncontrolled inflation instead. The West experienced a decade of low growth, high unemployment and high inflation. Many people believed that stabilisation policy had done more harm than good and that it should be retired.
Robert E. Hall and Michael Woodford are awarded this year’s prize in economic sciences for demonstrating how economic models could be reconstructed to revitalise stabilisation policy. Rather than basing the models on statistical links between macroeconomic variables, such as inflation, production and consumption, they chose to build them on a microeconomic foundation. This encompasses an understanding for how the total mass of individual households and businesses affect the economy through their actions..”
Read more about the 2026 Prize in Economic Sciences.
Illustration: Niklas Elmehed / Nobel Prize Outreach