Listen to this articleDear 3 minutesThe audio version of this article is generated using AI-based technology. Pronunciation errors may occur. We are working with our partners to continually review and improve results. American-born economists Robert E. Hall and Michael Woodford won the Nobel Prize in Economics on Monday for their work on models that have helped governments and central banks manage economic crises. The Royal Swedish Academy of Sciences announced the winners in Stockholm, saying the two were being honored for their work that has helped policymakers cope with economic fluctuations. “The honorees have helped us smooth out the ups and downs of the economy,” the academy said in a statement. Hall is affiliated with Stanford University in California and Woodford with Columbia University in New York. Woodford spoke to the committee by phone Monday from New York and said, “It’s a tremendous honor, it’s a surprise.” The Nobel Prize in Economics is announced in Stockholm on Monday. Hall and Woodford won the award for their work on models that have helped governments and central banks manage economic crises. (Anders Wiklund/TT News Agency/The Associated Press) “The work of the laureates has provided us with a stable theoretical basis for the models now used by central banks and governments around the world,” John Hassler, chairman of the Economic Sciences Prize Committee, said in a press release. “With them, we are better equipped to deal with shocks to the economy, such as energy crises or sudden changes in the amount of household consumption.” ‘New basis for stabilization policy’For decades, governments responded to economic shocks by following the Depression-era prescriptions of British economist John Maynard Keynes: intervene in the economy by reducing taxes and increasing public spending, thereby encouraging consumers and businesses to spend and invest themselves and help restart growth. “This is the Keynesian recipe and it worked well, until ‘It didn’t,'” said Timo Boppart of the Nobel Prize in Economics committee. Policymakers had thought that economic management involved simple trade-offs: unemployment, for example, would stay low at a time of high inflation and rise when inflation fell. But the “stagflation” of the 1970s, when the world economy simultaneously experienced high inflation and high unemployment, showed that the formula was simplistic, Hall and Woodford set out to come up with an improved model that took into account how consumers and businesses actually made decisions about whether to invest and spend. “In separate contributions, Robert E. Hall and Michael Woodford helped build this new foundation for stabilization policy,” Hassler said Last year, three researchers who study business innovation, including Canadian economist Peter Howitt, won for explaining how new products and inventions promote economic growth and human well-being, even as they leave older companies in the lurch. dust. Former UN human rights chief wins Nobel Peace Prize: Former UN human rights chief Navi Pillay wins Nobel Peace Prize South African jurist Navanethem (Navi) Pillay won the 2026 Nobel Peace Prize for her work on human rights and international law. Her career has included investigations into atrocities in Rwanda, Myanmar and Gaza, where her findings drew harsh criticism from Israel. economics is formally known as the Bank of Sweden Prize for Economic Sciences in Memory of Alfred Nobel. The central bank established it in 1968 as a memorial to Nobel, the 19th-century Swedish businessman and chemist who invented dynamite and established the five Nobel Prizes. Nobel purists emphasize that the economics prize is not technically a Nobel Prize, but it is. 12 million Swedish krona (about 1.7 million Canadian dollars), whether for an individual, a small group of awardees or an organization.
