The 2026 Nobel Prize in Economics has been awarded to two American scholars, Robert Hall and Michael Woodford, according to an announcement by the Royal Swedish Academy of Sciences. The prestigious prize, officially known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is the final Nobel of the year to be announced.
The two laureates were honored for developing new macroeconomic models that improve the ability to deploy effective stabilization policies. As a result, fiscal and monetary measures can be used to soften fluctuations that harm the economy.
"The laureates' work has provided us with a solid theoretical foundation for the models now used by central banks and governments around the world," John Hassler, chair of the Committee for the Prize in Economic Sciences, said in a statement.
"Thanks to them, we are better equipped to respond to economic shocks, such as energy crises or sudden changes in household spending."
During the oil crises of the 1970s, the prevailing Keynesian models used to determine when and how to deploy responses to recessions and other economic fluctuations no longer worked. Hall and Woodford went on to develop new tools to understand which policy responses could be most effective.
According to the academy, rather than building models based on statistical relationships between macroeconomic variables such as inflation, output, and consumption, the two scholars chose to build them on microeconomic foundations. This approach incorporates an understanding of how the aggregate of individual households and firms affects the economy through their behavior.
The economics prize was first awarded in 1969 and is not among the original five prizes created under the 1895 will of industrialist and dynamite inventor Alfred Nobel, but was established by Sweden's central bank.
Most past laureates have come from the United States. Only three women have ever won the prize, most recently Claudia Goldin in 2023 for her work on the impact of gender on wages and employment in the US over time.
Last year, Joel Mokyr, Philippe Aghion, and Peter Howitt won for their work on "creative destruction" and how new technology and production methods can drive growth and raise living standards.
Like the other Nobel Prizes, the economics prize includes a diploma, a gold medal, and a check worth $1.2 million.
The Nobel Prizes in medicine, physics, chemistry, literature, and peace were announced earlier in the week, with South African jurist Navi Pillay and Canadian writer Anne Carson among the winners.
