Nobel in economics goes to Hall and Woodford, Fehr misses out again

The 2026 Nobel Prize in economics was awarded on Monday to Robert E. Hall, a professor at Stanford, and Michael Woodford, who teaches at Columbia University. The prize recognizes their work "on the microeconomic foundations of macroeconomic stabilization."

According to the committee of the Royal Swedish Academy of Sciences, the models developed by the two economists have improved the ability to implement effective stabilization policies, useful for countering economic crises and keeping inflation under control. Hall and Woodford studied how businesses and households react to state intervention and monetary policy decisions, focusing in particular on the role of expectations about the future. Their work shows that the mere announcement of a measure by a government or a central bank can be enough to influence economic behavior.

This distinction matters for public finances: if the credibility of an announcement can already shape the expectations of businesses and households, the question arises as to how far this mechanism can limit the need for more costly spending measures, and how long it remains effective once trust in institutions erodes. The source does not address these questions, but the prize-winning research helps frame them.

Named among the possible winners for years, Ernst Fehr, a Swiss and Austrian citizen who teaches at the University of Zurich, was once again left empty-handed. Fehr is regarded as a leading figure in behavioural economics: his studies have helped to qualify the figure of "homo economicus," driven solely by self-interest.

A recent prize, not among the original Nobels

The Nobel Prize in economics is not among the awards established by Alfred Nobel. It was created in 1968 by the Bank of Sweden to mark its 300th anniversary, and like the other prizes, it is presented on 10 December, the anniversary of Nobel's death.

In 2025 the prize went to Joel Mokyr, an Israeli-American citizen born in the Netherlands, the Frenchman Philippe Aghion and the Canadian Peter Howitt, for explaining the role of innovation in economic growth: Mokyr received half the prize, the other two a quarter each.

The previous week, the other 2026 Nobel prizes had been announced: medicine to Karl Deisseroth, Peter Hegemann and Georg Nagel; physics to Francis Halzen; chemistry to Henri B. Kagan and Kenso Soai; literature to Anne Carson; peace to Navi Pillay.