Robert E. Hall and Michael Woodford, both born in the United States, have been awarded this year’s Nobel Memorial Prize in Economics. The Royal Swedish Academy of Sciences announced in Stockholm on Monday, recognizing their work on models that help governments and central banks respond to economic shocks.
The academy said the pair laid the groundwork for understanding how economies can be steadied through rises and falls. Hall is linked to Stanford University, while Woodford is at Columbia University. Speaking to the committee by phone from New York, Woodford said the news came as a surprise and a great honor.
John Hassler, who chairs the prize committee, explained that the laureates gave central banks and governments a solid theoretical base for the models they rely on today. In his view, this leaves the world better prepared for events like energy crises or abrupt shifts in household spending.
The award is officially called the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. Sweden’s central bank created it in 1968 to honor the 19th-century businessman and chemist who invented dynamite and founded the five original Nobel Prizes. Some purists note that it is not technically a Nobel Prize, though it is always presented alongside the others on Dec. 10, the anniversary of his death in 1896.
Prizes in medicine, physics, chemistry, literature, and peace were announced last week. The economics award comes with 12 million Swedish kronor, roughly $1.2 million, no matter how many people share it. Last year’s winners were three researchers recognized for showing how new products and inventions drive growth and improve lives, even as they push older companies aside.
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Sources: The Associated Press, NBC News
