Hall and Woodford receive the 2026 Nobel Prize in Economics for their contributions to macroeconomic stabilisation

The 2026 Nobel Prize in Economics recognises contributions to macroeconomic stabilisation

The Royal Swedish Academy of Sciences awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Robert E. Hall and Michael Woodford. Their work has provided key microeconomic foundations for understanding how expectations influence stabilisation policies.

According to the Banco de España, the research of both economists demonstrates that the expectations of households, workers and companies condition variables such as consumption, employment and inflation. These ideas are integrated into the models currently used by central banks to design their policies.

Impact on the effectiveness of monetary policy

The laureates have developed analytical tools that explain why credibility and future expectations determine the success of stabilisation measures. This recognition underscores the relevance of their contributions in contexts of economic uncertainty.

The Banco de España analysis highlights that these models form part of the conceptual framework used by institutions to anticipate private sector reactions to changes in interest rates or in other policy tools.

Their work shows how expectations determine the effectiveness of economic stabilisation policies.

The prize was announced on 12 October 2026 and has been widely commented on in economic media, highlighting its connection with the current practice of monetary policy in Europe and other markets.