The Royal Swedish Academy of Sciences has awarded this year’s Nobel Prize in Economic Sciences to the American economists Robert E. Hall and Michael Woodford. The prize was awarded in recognition of their development of macroeconomic models that helped to reduce the length and depth of economic downturns.
According to the Academy, the economists’ work in macroeconomic modelling has given policymakers additional tools to smooth out the economic cycle. As well as reducing the severity of downturns, their work also helped to cool the potentially negative impacts of economic booms.
