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Hall and Woodford win Nobel economics prize
Robert E. Hall and Michael Woodford won for models that link individual choices to economic stabilisation.
What happened
The Royal Swedish Academy of Sciences awarded Robert E. Hall and Michael Woodford the economics prize for work on microeconomic foundations of macroeconomic stabilisation. Their models use household and business behaviour to help governments and central banks assess fiscal and monetary responses to inflation, booms and recessions.
Numbers
- 12 million kronorPrize amount for one category — Shared between joint laureates
- About US$1.2 millionApproximate category prize value — Before division between winners
- 10 DecNobel ceremonies are scheduled — In Sweden and Norway
Questions
- What is the prize formally called?
- It is formally the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, awarded by Sweden’s science academy.
- What problem did this approach address?
- Earlier Keynesian models performed poorly during the nineteen-seventies oil shock, when low growth, unemployment and inflation occurred together.
- Why does the research matter beyond academia?
- Officials can use household and firm responses to test how public spending or monetary changes may affect the wider economy.
- Where do the laureates teach?
- Hall is affiliated with Stanford University in California, while Woodford is affiliated with Columbia University in New York.
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The catch
Coverage describes the models’ purpose, not a measured record of how any single policy performs.