On Monday, October 12, the names of the laureates of the 2026 Nobel Prize in Economic Sciences became known.
They were American economists Robert Ernest Hall and Michael Dean Woodford. The men were awarded the prize for research that helped explain how the decisions of individuals, businesses and financial institutions affect the economy as a whole and how states can counter crises.
UNN has compiled all the interesting information about this year's triumphants and how their scientific achievements could change the global economy.
It should be noted that this is the final award of this year's Nobel Week, during which researchers in the fields of medicine, physics and chemistry, as well as the laureates of the prizes in literature and peace, have already been honored. This year, the monetary award was increased to 12 million Swedish kronor.
Who was tipped to win the Nobel Prize in Economic Sciences
This year's forecasts by international media and analysts featured researchers of the labor market, behavioral economics and monetary policy. One of them was American economist David Autor, known for his work on the impact of automation, technology and global trade on employment and wages. Colin Camerer and George Loewenstein were also mentioned; they study how psychological factors influence people's economic decisions. Other possible contenders included Michael Woodford, whose work focuses on monetary policy and inflation expectations.
Why Hall and Woodford were awarded the prize
They received the prestigious award with the citation "for the microeconomic foundations of macroeconomic stabilization."
The scientific work of Robert Ernest Hall and Michael Dean Woodford focuses on the relationship between the behavior of individual market participants and the overall state of the economy. In particular, it concerns the mechanisms behind the formation of prices, employment, consumption, inflation expectations and the impact of interest rates on economic activity.
The main idea of this area of research is that understanding inflation, unemployment or an economic downturn requires more than analyzing nationwide indicators alone. It is also necessary to take into account how households make decisions about spending, how businesses set prices and wages, and how investors assess future risks. This approach makes it possible to create economic models that explain the causes of crises and help assess the consequences of decisions by central banks and governments.
Who is Robert Ernest Hall
Robert Ernest Hall is an American economist and emeritus professor at Stanford University. His research covers macroeconomics, the labor market, unemployment, consumption and economic fluctuations.
One important area of his work was the study of the causes of rising unemployment during recessions. In particular, Hall examined why it becomes more difficult for people to find jobs during an economic downturn and why employment recovery can take considerably longer than the economic crisis itself.
In his work, the economist showed that the increase in unemployment during recessions is largely associated with a reduction in employment opportunities, rather than solely with an increase in the number of layoffs. His scientific insights became important for developing government employment policy, forecasting economic recovery and assessing the consequences of crises for workers and employers.
What Michael Dean Woodford is known for
Michael Dean Woodford is an American economist and professor at Columbia University, known for his research on monetary policy, inflation and the mechanisms through which central banks influence the economy. One of his best-known works is the book Interest and Prices: Foundations of a Theory of Monetary Policy, published in 2003.
Woodford paid particular attention to how citizens' and businesses' expectations regarding future prices and interest rates influence economic decisions already today. His research helped explain why the effectiveness of monetary policy depends not only on the actual raising or lowering of rates, but also on how clearly the central bank communicates its future actions.
For example, expectations of higher borrowing costs may prompt businesses to postpone investment and consumers to reconsider major purchases even before the policy rate changes. This mechanism is important for managing inflation and maintaining financial stability.
Why the research of this year’s Nobel laureates is important for the economy
Research into the microeconomic foundations of macroeconomic stabilization helps explain how economic policy affects people’s daily lives. When a central bank raises its policy rate, this may lead to higher borrowing costs, reduced consumer spending, and slower investment. At the same time, such a step can curb inflationary pressures. However, the outcome depends on many factors: people’s expectations, businesses’ behavior, conditions in the labor market, and confidence in financial institutions.
Economic models that take these factors into account are used to analyze the consequences of monetary decisions, assess the risks of recession, and choose economic stabilization measures.
For Ukraine, these approaches also have practical significance, particularly when analyzing inflation, currency expectations, lending, and the recovery of economic activity amid the war.
At the same time, economic models do not guarantee accurate forecasts of crises, since the behavior of market participants may change under the influence of unforeseen circumstances.
How much money will the winners receive in 2026?
In 2026, the monetary award for each Nobel Prize will amount to 12 million Swedish kronor. Compared with last year, the sum has been increased by one million kronor. The Nobel Foundation explained the decision by its desire to preserve the value of the award. The increase took place in the year marking the 125th anniversary of the first Nobel Prize ceremony.
If several researchers receive the prize, they will divide the funds in accordance with the organizers’ decision. Along with the monetary award, laureates receive a medal and a diploma.
Why the Nobel Prize in Economic Sciences has a special status
The official name of the award is the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Unlike the five traditional Nobel Prizes, it was not provided for in the inventor’s will. It was established by Sweden’s central bank in 1968, and the first laureates were honored in 1969.
Through 2025, inclusive, the prize in economic sciences had been awarded 57 times, and 99 scholars had become laureates. In 2025, the prize was awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt for explaining economic growth through innovation. In 2024, the award went to Daron Acemoglu, Simon Johnson, and James Robinson for research into the influence of social institutions on countries’ prosperity. In 2023, the laureate was Claudia Goldin, who studied the position of women in the labor market. And in 2022, Ben Bernanke, Douglas Diamond, and Philip Dybvig were honored for their work on banks and financial crises.
The award is presented for research that helps us better understand economic growth, financial crises, labor markets, and the behavior of companies and individuals.
Reminder
Earlier, UNN reported that Canadian writer Anne Carson had become the 2026 Nobel laureate in literature. She was honored for her innovative dialogue with the classical tradition.