The Royal Swedish Academy of Sciences announced on Monday, Oct. 12, 2026, that American economists Robert E. Hall and Michael Woodford won the 2026 Nobel memorial prize in economics. The academy said the two were being honored for the "microeconomic foundations of macroeconomic stabilisation," which examines how governments and central banks can manage economic shocks.
The award, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is the final Nobel honor to be announced this year. Hall is affiliated with Stanford University in California, while Woodford is affiliated with Columbia University in New York. The two will share a prize totaling 12 million Swedish kronor, which is approximately $1.2 million.
The Prize Committee stated that the laureates' research provided a theoretical foundation for models now used by central banks and governments to address economic "peaks and troughs." John Hassler, chair of the Prize Committee, said the models help institutions manage sudden changes in household consumption or energy crises. Woodford, speaking by phone from New York, described the award as a "tremendous honor" and a surprise.
The award affects how central banks and governments manage national economies, influencing the strategies used to stabilize markets during periods of volatility. While the theoretical work is conducted by academics like Robert E. Hall and Michael Woodford, the resulting models are utilized by institutions that set interest rates and fiscal policy. Decisions made using these frameworks can impact the cost of borrowing for home buyers and small-business owners, as well as the stability of consumer prices during energy crises or shifts in household spending.
The scale of the prize is 12 million Swedish kronor, roughly $1.2 million, which is awarded to the laureates. This prize money is funded by the Swedish central bank rather than the original Nobel foundation, though it is presented alongside the other five Nobel categories. The laureates' work on "boom-bust cycles" provides tools that central bankers use to decide when to intervene in the economy to prevent high inflation or deep recessions, which in turn affects the job security and purchasing power of workers across various sectors.
The announcement sets the stage for the formal prize ceremony, which will take place on Dec. 10, 2026. This date marks the anniversary of Alfred Nobel's death. While the honors for medicine, physics, chemistry, literature, and peace were announced during the previous week, the economics prize concludes the 2026 award season. The laureates will receive their medals and prize money during the December events in Stockholm.