Robert E. Hall and Michael Woodford awarded Nobel Prize in Economics.

BanglaPress Desk: US economists Robert E. Hall and Michael Woodford have jointly won the prestigious Nobel Prize in Economics for 2026. The Royal Swedish Academy of Sciences announced their names in Stockholm, Sweden, on Monday (October 12) in recognition of their effective contributions to maintaining macroeconomic stability and shaping policy.
Formulating effective policies for governments and central banks to tackle situations like economic recessions or uncontrolled growth has always been a major challenge. The limitations of conventional Keynesian economic models came under renewed scrutiny during the oil crisis of the 1970s, a time when Western nations faced the simultaneous challenges of low growth, high unemployment, and rampant inflation. Against the backdrop of this crisis, Hall and Woodford conducted groundbreaking research to place macroeconomic analysis on a more realistic and robust foundation.
The models proposed by these two economists integrate microeconomic principles with macroeconomics. A key feature of their research is the insight that individuals, families, and businesses do not base economic decisions solely on current conditions; rather, they also take future possibilities and expectations into account. These models precisely illustrate how individual decisions—such as how people save or spend, or how firms set product prices—exert a significant impact on the overall economy.
According to John Hassler, Chair of the Nobel Committee, the research conducted by Hall and Woodford has established a lasting theoretical foundation for the economic models utilized by central banks and governments worldwide. These models greatly assist policymakers in making sound decisions when confronting sudden spikes in energy prices or unexpected economic shocks.
Previously, the Nobel Prize in Economics for 2025 was awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt. Although the Nobel Prize in the original five categories was first awarded in 1901 in accordance with the will of Alfred Nobel—the inventor of dynamite—the prize in the field of economics was established by Sweden's central bank in 1968. Traditionally, the prizes for Medicine, Physics, Chemistry, Literature, and Economics are awarded annually in Stockholm, Sweden, while the Nobel Peace Prize is awarded in Oslo, Norway.
BP/TD