STOCKHOLM — American economists Robert E. Hall and Michael Woodford won the 2026 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel on Monday for work on the microeconomic foundations of macroeconomic stabilisation.

The Royal Swedish Academy of Sciences announced the award in Stockholm. The prize is worth 12 million Swedish kronor, about US$1.2 million at the exchange rate cited by Reuters.

Research behind modern stabilization policy

Microeconomic foundations connect the choices made by households, workers and companies to the larger movements of inflation, employment and economic output. Models built on those links help economists assess how interest rates, fiscal policy and expectations may affect an economy during booms, recessions and other shocks.

Hall is a professor at Stanford University and a senior fellow emeritus at the Hoover Institution. He also chairs the National Bureau of Economic Research committee that dates U.S. business cycles. His research has covered employment, inflation, productivity, competition and aggregate economic policy.

Woodford is the John Bates Clark Professor of Political Economy at Columbia University. His work focuses on macroeconomic theory and monetary policy, including the influential book Interest and Prices: Foundations of a Theory of Monetary Policy.

Final award of the 2026 prize cycle

The economics award was established by Sweden’s central bank and first presented in 1969. It was not one of the five prizes created in Alfred Nobel’s will, but it is awarded with the other Nobel honours.

Hall and Woodford share the prize. The economics announcement completed the 2026 Nobel season after the medicine, physics, chemistry, literature and peace prizes were named last week.

Why the work matters in Canada

The questions recognized by the prize are central to Canadian policy debates about inflation, employment and the response to recessions. Woodford has also co-authored research published by the Bank of Canada on fiscal and monetary stabilization when interest rates are near their lower bound.

Sources: Reuters, published October 12 at 5:51 a.m. EDT; Associated Press, October 12; Royal Swedish Academy of Sciences announcement event; Stanford University profile of Hall; Columbia University profile of Woodford; Bank of Canada working paper co-authored by Woodford.

Lead image: flag of Sweden via Wikimedia Commons, public domain. Illustrative image.