Robert E. Hall and Michael Woodford | Putting people in economics
The winners of the 2026 Economics Nobel Prize transformed macroeconomics by showing how individual choices, household expectations and business behaviour shape the economy and influence the effectiveness of government policies
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Robert E.
Hall and Michael Woodford, the 2026 Nobel economic sciences laureates | Photo Credit: nobelprize.org
Most people view macroeconomics as a result of the mechanical tweaking of some variables to alter other variables.
For example, if aggregate consumer demand is down, there is immediately a call for lower interest rates and higher government doles.
Similarly, when demand outstrips supply, then the call is the opposite: raise interest rates and cut back on handouts.
There was also a long-held belief that unemployment and inflation had an inverse relationship — as shown in the famous Phillips Curve — and that income and consumption moved in tandem.
If governments could tweak one, the belief was that this would result in changes in the other.
economy, business and finance / macro economics
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