American economists Robert Hall and Michael Woodford receive the Nobel Prize in economics for their work on stabilisation models, which aim to reduce the economy’s peaks and troughs.
The Nobel Prize in economics was awarded on Monday to American economists Robert Hall and Michael Woodford for their work on stabilisation models. According to the Royal Swedish Academy of Sciences, these new macroeconomic models significantly improved our ability to implement effective stabilisation policy.
Stabilisation policy is a set of measures governments and central banks take to stabilise the business cycle, maintain employment levels, and keep inflation under control. Fiscal and monetary policy measures based on these models can potentially reduce the economy’s peaks and troughs, according to the academy.
The award-winning economists were recognised for demonstrating how economic models could be reconstructed to revitalise stabilisation policy. Instead of using statistical links between macroeconomic variables, they opted to build their models on a microeconomic foundation that encompasses an understanding for how the total mass of individual households and businesses affect the economy through their actions.
The two economists will equally share the prize amount of 12 million Swedish kronor, or approximately Rs 11.4 crore. It is important to note that this was the last Nobel Prize awarded in 2021.
In previous years, other prizes were awarded as follows:
– On October 5, the prize in medicine went to Peter Hegemann, Georg Nagel and Karl Deisseroth for their research on brain activity.
– The next day, the prize in physics was awarded to Belgian physicist Francis Halzen for the discovery of high-energy neutrinos of astrophysical origin and his contributions to the IceCube Neutrino Observatory in Antarctica.
– On Wednesday, the prize in chemistry was awarded to Henri Kagan and Kenso Soai for their research into the mirror images of molecules, which is decisive for the development of pharmaceuticals.
– The following day, the prize in literature was awarded to Canadian poet, essayist and translator Anne Carson for her ‘bold and inventive’ body of work that, ‘in playful dialogue with the classical tradition, has created new forms for contemporary literature’.
– On Thursday, the Nobel Peace Prize was awarded to South African jurist Navi Pillay for her efforts to promote peace and international law.
In 2025, the prize in economics was awarded to economists Joel Mokyr, Philippe Aghion and Peter Howitt for their work on the formation of societal institutions and its effect on prosperity.
Source:
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