India, Oct. 12 -- A household's decision to spend or save, a company's choice to raise prices and a central bank's move to change interest rates can all influence the wider economy. Understanding how these decisions connect has earned American economists Robert E. Hall and Michael Woodford the 2026 Nobel Prize in Economics, announced by the Royal Swedish Academy of Sciences on Monday, October 12.

Their research has helped governments and central banks build better models to respond to inflation, recessions and other economic shocks.

The economists will share prize money of 12 million Swedish kronor, worth around $1.2 million. Their work focuses on the microeconomic foundations of macroeconomic stabilisation, linking the decisions of ind...