The 2026 Nobel Prize in Economics has been awarded to American economists Robert Hall, 83, a professor at Stanford University, and Michael Woodford, 71, a professor at Columbia University, for their research on the microeconomic foundations of macroeconomic stability and the framework of modern monetary policy.
According to Yonhap News on October 12, the Swedish Royal Academy announced the selection of the two as joint winners of this year's Nobel Prize in Economics.
The Academy stated, "The research of both individuals has brought significant changes to economic stabilization policies," adding that the 'New Keynesian model' developed from their work allows for the explanation and quantification of the impact of stabilization policies on economic fluctuations.
The policy model they established is widely used as a key benchmark by central banks and treasuries around the world when formulating macroeconomic policies aimed at mitigating real economic shocks and ensuring price stability.
Both scholars theorized that economic agents make rational decisions based on future expectations. They analyzed how households adjust their savings considering future prospects and how businesses set prices based on forecasts of future economic conditions, emphasizing that the way governments and central banks communicate policy directions and manage 'expectations' significantly influences the real economy.
Jon Hassler, chair of the Nobel Prize in Economics committee, remarked, "Thanks to the research of the laureates, countries around the world can respond more effectively to sudden shocks such as energy crises or rapid changes in household consumption."
The 'New Keynesian' model they established identifies that because economic agents make rational decisions based on future expectations, the manner in which monetary authorities communicate policy plans and manage 'expectations' is crucial in shaping the flow of the real economy. This model is currently a key compass for major central banks and treasuries, including the Bank of Korea, in determining interest rates and managing finances during crises.
With the announcement of the economics prize, this year's schedule of Nobel Prize announcements, which began with the Physiology or Medicine Prize on October 5 and included the Physics, Chemistry, Literature, and Peace Prizes, has concluded. The award ceremony is set to take place on December 10, the anniversary of Alfred Nobel's death, where recipients will receive certificates, medals, and a prize of 12 million Swedish kronor (approximately $1.1 million) in each category.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.