The 2026 Nobel Prize in Economics was awarded to the American duo Robert Hall (Stanford University) and Michael Woodford (Columbia University) for their work on the “microeconomic foundations of macroeconomic stabilization.” The insights provided by their work help us understand the potential future trajectory of the Gulf Cooperation Council (GCC) countries’ economies as they strive to diversify away from oil.
Coincidentally, the energy policies pursued by Arab oil-exporting countries during the 1970s contributed to the genesis of Hall and Woodford’s work, but the story begins much earlier, dating back to the 19th century. Before the interwar period, the kind of macroeconomic policy pursued by governments today to stabilize their economies was essentially absent. Policymakers perceived the role of economic authorities as very narrow: balancing the state budget and ensuring liquidity in the financial system by managing the money supply and overseeing banks.
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Dr. Omar Ahmad AlUbaydli, Studies and Research Director