Hall and Woodford, both economists based in the United States, received the Nobel Prize in economics in recognition of their work developing models aimed at stabilising economic conditions. The Royal Swedish Academy of Sciences noted that macroeconomic frameworks developed by Hall and Woodford had advanced policymakers' capacity to carry out effective stabilisation measures.
Governments and central banks deploy macroeconomic tools to smooth out fluctuations in the business cycle, support employment, and hold inflation in check — a coordinated approach known as stabilisation policy. The academy noted that government spending and interest-rate tools built on those models hold the potential to smooth out the highs and lows that economies typically cycle through.
The academy indicated that Hall and Woodford, who will divide the 12-million-Swedish-kronor prize equally between them, earned the honour for showing how economic models could be restructured to reinvigorate stabilisation policy — an approach that moved away from tracing statistical relationships among macroeconomic variables such as inflation, output, and consumption, and instead grounded those models in microeconomic principles capturing how the collective behaviour of individual households and businesses shapes the broader economy.
Of all the Nobel categories declared this year, economics held its announcement until the very end. Three researchers — Peter Hegemann, Georg Nagel, and Karl Deisseroth — received the medicine prize on 5 October, with the honour tied to their collective work probing how the brain functions.
The physics prize followed a day later, going to Francis Halzen of Belgium in recognition of his role in detecting high-energy neutrinos traced to astrophysical sources and his foundational work building the IceCube Neutrino Observatory beneath the Antarctic ice. Chemistry's top prize went jointly to Henri Kagan and Kenso Soai, whose independent investigations into molecular chirality — the phenomenon by which certain compounds exist as non-superimposable mirror-image pairs — have underpinned advances in pharmaceutical design.
The literature prize went to Anne Carson — a Canadian poet, essayist, and translator — on the strength of a body of writing that judges described as both daring and inventive, one that draws on classical traditions to generate fresh forms within contemporary literature. Navi Pillay, a jurist from South Africa, received the Nobel Peace Prize in recognition of her work advancing peace and the principles of international law.
Three economists — Joel Mokyr, Philippe Aghion, and Peter Howitt — received the 2025 economics prize for research examining how societal institutions take shape and what that process means for the long-run prosperity of populations.
