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US academics Robert Hall and Michael Woodford won the 2026 Nobel economics prize for "microeconomic foundations of macroeconomic stabilisation", the Royal Swedish Academy of Sciences said on Monday.
The two laureates developed new macroeconomic models that improved our ability to implement effective stabilisation policy, enabling well-timed fiscal and monetary policy measures that can reduce the intensity of damaging swings in the economy, Reuters reported.
"The laureates’ work has provided us with a stable theoretical foundation for the models that are 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.
"With them, we are better equipped to deal with shocks in the economy, such as energy crises or sudden changes in how much households consume."
The economics prize, first awarded in 1969, is not one of the original five awards created in the 1895 will of industrialist and dynamite inventor Alfred Nobel, but was established by Sweden's central bank.
The Nobel prizes for medicine, physics, chemistry, literature and peace were announced last week.