A Nobel Prize for Thinking Ahead: Hall and Woodford’s Great Expectations
Suppose you get a $1,000 payment. How much do you spend? Before answering, we’d want to know a few things: Is this a one-time payment? The first of many? Can you borrow? Do you already have savings?
This year’s Nobel Prize in economics went to Robert Hall and Michael Woodford for providing the theory to make these questions concrete, the empirical work to test the theories, and an explanation of how both optimal and realistic policy differ depending on the answers.
When co-authors win the Nobel Prize, as in 2024, it’s pretty simple to see why they’re paired together…
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