r/Economics • u/Serialk Moderator • 2d ago

News 2026 Nobel Prize in Economics awarded to Robert E. Hall and Michael Woodford

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2026 was awarded jointly to Robert E. Hall and Michael Woodford "for microeconomic foundations of macroeconomic stabilisation."

Nobel Prize Committee

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u/LeahDeNuccio 2d ago

I'm not a macro, so I don't have strong opinions on this. However, I was reading the wikipedia page for Hall's random walk model of consumption and found this quote to be hilarious:

> Controversy has arisen over using Euler equations to model consumption. When applying the Euler consumption equations one has trouble explaining empirical data.

https://en.wikipedia.org/wiki/Random_walk_model_of_consumption

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u/DueAnalysis2 2d ago

Lmao, under advantages, it begins with "First....", and then doesn't outline any other advantages

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u/UnknownBreadd 2d ago

Why doesn’t reality just change to fit the equations? Doesn’t it know that it is not conforming to an economist’s armchair theories?

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u/EconomistWithaD 2d ago

To me, I interpret that more as:

  1. Production is not CRS.

  2. Broadly, imperfect competition should be the default assumption in models.

  3. Intertemporal choice depends on more than the rate of time.

None of those contradict most macro theories. They just make them mathematically or problematic to solve for reduced form hypothesis testing.

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u/755goodmorning 2d ago

Notably, Bob Hall also invented the concept of freshwater versus saltwater economist.

Beyond that, he’s been enormously impactful and was in that insane MIT graduate class that included Joseph Stiglitz, Robert Merton, Dixit and Stan Fischer. All of whom credited Bob Hall with shaping their thinking over the years.

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u/755goodmorning 2d ago

lol who in gods name is downvoting this? There are people who don’t like Stanley Fischer? Lolol