American-born economists Robert E. Hall and Michael Woodford won the Nobel memorial prize in economics on Monday for their work on models that have helped governments and central banks manage economic shocks.
The Royal Swedish Academy of Sciences announced the winners in Stockholm, saying the winners were being honoured “for microeconomic foundations of macroeconomic stabilisation.”
“The laureates have helped us smooth out the economy’s peaks and troughs,” the academy said in a statement.
Hall is affiliated with Stanford University in California, and Woodford with Columbia University in New York.
Woodford spoke to the committee by phone Monday from New York, saying: “It’s a tremendous honour, it’s a surprise.”
“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 news release.
“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.”
Last year, three researchers who study business innovation won for explaining how new products and inventions promote economic growth and human welfare, even as they leave older companies in the dust.
