2026 Economics Nobel Prize: Putting the humanity in macroeconomics

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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.

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