Hall and Woodford Awarded Nobel Memorial Prize in Economics

Robert E. Hall and Michael Woodford have been awarded the Nobel Memorial Prize in Economic Sciences for their foundational work on models that have significantly influenced how governments and central banks manage economic instability. The Royal Swedish Academy of Sciences announced the award in Stockholm, citing their contributions to the "microeconomic foundations of macroeconomic stabilization."

The academy stated that the laureates' research has been instrumental in helping to "smooth out the economy’s peaks and troughs." John Hassler, chair of the Committee for the Prize in Economic Sciences, noted in a press release that their work has provided a "stable theoretical foundation for the models that are now used by central banks and governments around the world."

"With them, we are better equipped to deal with shocks in the economy, such as energy crises or sudden changes in how much households consume," Hassler added. The theoretical frameworks developed by Hall and Woodford are credited with enhancing the ability of policymakers to respond to economic challenges.

Robert E. Hall is affiliated with Stanford University in California, and Michael Woodford is associated with Columbia University in New York. Woodford, speaking to the committee by phone from New York, described the award as "a tremendous honor" and "a surprise."

The economics prize, formally known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, was established by Sweden's central bank in 1968. It is presented annually alongside the other Nobel Prizes on December 10, commemorating the anniversary of Alfred Nobel's death.

Last year's Nobel Memorial Prize in Economic Sciences was awarded to three researchers for their work on business innovation and its role in economic growth and societal welfare.

The prize money accompanying this year's award is 12 million Swedish kronor, approximately $1.2 million.