Americans Hall and Woodford win economics Nobel
Americans Robert Hall and Michael Woodford were awarded the Nobel economics prize Monday for their work on how monetary and fiscal policy can better stabilise disruptive economic fluctuations. The two were honoured for developing new models for managing recessions and other crises that fail to respond to traditional tools. "On the basis of these models, well-timed fiscal and monetary policy measures can reduce the economy's peaks and troughs," the jury said. The Royal Swedish Academy of Sciences explained in a statement that ever since John Maynard Keynes formulated his economic theories almost a century ago, "stabilisation" policies had long let officials boost economic growth when needed. But during the oil shocks in the 1970s, the Keynesian models that governed when and how action should be taken no longer worked. Hall, 83, a professor at Stanford University, and Woodford, a professor at Columbia University born in 1955, separately began to explore new models. "Rather than basing the models on statistical links between macroeconomic variables, such as inflation, production and consumption, they chose to build them on a microeconomic foundation," the jury said. Hall and Woodford's models include an "understanding for how the total mass of individual households and businesses affect the economy through their actions", it said. A fundamental...
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