News about business cycle

The Royal Swedish Academy of Sciences awarded the 2026 Sveriges Riksbank Prize in Economic Sciences to Robert E. Hall and Michael Woodford on 12 October 'for microeconomic foundations of macroeconomic stabilisation'. The ECB blog post explains how stabilisation policy aims to dampen booms and recessions, an idea that grew out of Keynes's demand-side theory after the Great Depression. Hall's work built a theory of individual consumption based on the permanent income hypothesis, which avoided the need for data on consumers' unobservable expectations of lifetime income.