DOMINANT ANGLE
Bogotá takes from the 2026 Nobel in economics a toolbox for central banks: the Hall and Woodford models are presented as what makes energy crises and inflation less lasting.
Dominant angle identified — does not reflect unanimity of this country’s media
KEY POINTS
- 01
The prize, worth $1.2 million, rewards Robert Hall (Stanford) and Michael Woodford (Columbia) for the "microeconomic foundations of macroeconomic stabilization" (La República).
- 02
According to the Academy as cited by Portafolio: "Recessions and episodes of high inflation have not disappeared, but they are less lasting."
- 03
Traditional Keynesian models were undone by the oil shock of the 1970s, which led Hall and Woodford to build models on a microeconomic basis (Semana, El Colombiano).
ANALYSIS
Bogotá, October 13, 2026. The Colombian economic press welcomed the Bank of Sweden Prize in Economic Sciences, announced on Monday, October 12 by the Royal Swedish Academy of Sciences. It goes to Americans Robert E. Hall (Stanford) and Michael Woodford (Columbia) "for the microeconomic foundations of macroeconomic stabilization," according to La República, which adds that the award comes with $1.2 million and closes the Nobel season.
Portafolio stresses the "paradigm shift": by building in the decisions of individuals and firms, the two researchers produced new Keynesian models that helped in tackling the pandemic and the energy crisis. The paper quotes the Academy: "Recessions and episodes of high inflation have not disappeared, but they are less lasting." It recalls that traditional Keynesian models, based on the assumed stability of statistical correlations between inflation, consumption and unemployment, were undone by the oil crisis of the 1970s.
La República expands on this historical account: faced with Western stagflation, many experts judged that stabilization policy did more harm than good. Hall and Woodford are said to have put it back on its feet by starting from economic agents who are not passive. The same outlet runs a headline about the economists who "reformulated Keynes's ideas."
Semana and El Colombiano carry the agency wire: John Hassler, chair of the committee, says this work offers "a solid theoretical basis" for the models used by central banks and governments around the world, and that "we are better equipped" against energy shocks or sudden changes in household consumption. Michael Woodford, born in 1955, spoke of an "immense honor" and a "surprise."
Portafolio devotes a second article to the landmark works: Woodford's treatise, Interest and Prices, crowned in 2003 by the Association of American Publishers, his books with Bernanke and Taylor, as well as Hall's work on the high-tech economy and the reform of tax systems.
The Colombian view is above all technical and educational: it explains what the models change for monetary and fiscal policy. The articles provided draw no consequences for Colombia or for the central banks of emerging countries, and do not discuss the criticisms leveled at New Keynesian models.
SOURCES (4)
- El ColombianoMEDIUM
- La RepúblicaMEDIUM
- PortafolioMEDIUM
