These economists won the Nobel prize for transforming policy-making

The work of this year’s winners of the Nobel Prize for Economics has made central banks and governments ‘better equipped to deal with shocks in the economy’, says the committee chair. New Nobel laureates Robert E. Hall and Michael Woodford showed how economies are shaped by the decisions taken by individual households and businesses - and how those decisions, in turn, are shaped by people’s expectations of the future. Their work has helped transform how governments and central banks understand macroeconomic factors such as inflation and unemployment, and has enabled policy-makers to respond far more effectively when crises appear.