The Royal Swedish Academy of Sciences awarded the 2026 economics prize to Robert E. Hall and Michael Woodford “for microeconomic foundations of macroeconomic stabilisation.” Hall integrated household consumption and labour choices into business-cycle analysis, while Woodford built a modern monetary-policy framework around price setting, expectations and interest-rate rules. Together, their work helped make New Keynesian models core tools for central banks and finance ministries. The Academy says the models let policymakers quantify how rates, fiscal support and expectations affect inflation and output, but they are not automatic answers: results still depend on real-world parameters, institutional credibility and continual recalibration for new shocks.