Bank of Spain18 October 2026Artículo de opinión

Article by the Director General of Economics in El Mundo/Actualidad Económica. 'Hall and Woodford: Expectations and stabilisation of the business cycle'

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Article by David López Salido, the Bank of Spain's Director General of Economics, in El Mundo/Actualidad Económica on the contributions of Robert E. Hall and Michael Woodford, winners of the 2026 Nobel Prize in Economics. He explains how household and business expectations shape consumption, price-setting and the effectiveness of stabilisation policies.

Key points

Hall showed that consumption depends on expected lifetime income and changes only in response to news.
Woodford is one of the architects of the New Keynesian model used by central banks.

Who is affected

Audience interested in economics and monetary policy.

Plain-language version

A Bank of Spain official explains in the press the 2026 Nobel Prize in economics, won by Robert Hall and Michael Woodford. Their key idea: what households and firms expect about the future decides how much they spend and how they set prices. That is why central banks, which set interest rates, are so careful about what they say.

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Article by the Director General of Economics in El Mundo/Actualidad Económica. 'Hall and Woodford: Expectations and stabilisation of the business cycle'

Key points

Who is affected

Plain-language version

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