00:00The Royal Swedish Academy of Sciences has today decided...
00:03American economist Robert Hall and Michael Woodford were awarded the Nobel Economics Prize on Monday for their work
00:11on how monetary and fiscal policy can help stabilize fluctuations in the economy.
00:17According to the jury at the Royal Swedish Academy of Sciences, the laureate's work has provided a stable theoretical foundation
00:25for the models that are now used by central banks and governments around the world.
00:30A statement by the jury said, quote,
00:33With them, we're better equipped to deal with shocks in the economy, such as energy crises or sudden changes in
00:41how much households consume.
00:43During the oil crisis in the 1970s, the existing Keynesian models long used to determine when and how measures should
00:52be implemented
00:53to tackle recessions or other economic fluctuations no longer worked.
00:58That prompted Hall and Woodford to develop new tools for understanding which policy responses could be the most effective.
01:07The Economist Prize is the only Nobel not among the original five created on the will of Swedish scientist Alfred
01:14Nobel, who died in 1896.
