Hall and Woodford Win Economics Nobel for Stabilization Work
Robert E. Hall and Michael Woodford won the Nobel Prize in Economics. They will share the prize.
The award recognized their work on economic models and stabilization. Stabilization means keeping the economy steady when shocks hit.
Central banks and governments use models built on their work. The New York Times said the committee credited their ideas.
The ideas help policymakers handle economic shocks better. CBC said their models help smooth out economic highs and lows.
Bloomberg said their work explains the basic building blocks of economic stability. Hall is linked to Stanford University in the US.
Woodford is linked to Columbia University in the US. Bloomberg also said their work changed Keynesian thinking.
The change came after the 1970s oil crises. Reports also pointed to Hall's 1978 research on steady household spending. Woodford developed the New Keynesian model.
Key Terms 3
- Shocks Sudden events that hurt or disrupt the economy.
- Keynesian Ideas from economist John Maynard Keynes about government action during slumps.
- New Keynesian model A newer version of Keynes's ideas about how the economy works.