American professors Hall and Woodford win Nobel economics prize

American-born economists Robert E Hall and Michael Woodford have won the Nobel memorial prize in economics for their work on the micro-economic foundations of macro-economic stabilisation.

Hall is affiliated with Stanford University in California, and Woodford with Columbia University in New York.

The award was announced by the Royal Swedish Academy of Sciences in Stockholm.

"The laureates' work has provided us with a stable theoretical foundation for the models that are now used by central banks and governments around the world," John Hassler, chair of the Committee for the Prize in Economic Sciences, said.

"With them, we are better equipped to deal with shocks in the economy, such as energy crises or sudden changes in how much households consume."

Last year, three researchers who study business innovation won for explaining how new products and inventions promote economic growth and human welfare, even as they leave older companies in the dust.

The economics prize is formally known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. 

The central bank established it in 1968 as a memorial to Nobel, the 19th-century Swedish businessman and chemist who invented dynamite and established the five Nobel prizes.

Nobel purists stress that the economics prize is technically not a Nobel prize, but it is always presented together with the others on December 10, the anniversary of Nobel's death in 1896.

Nobel honours were announced last week in medicine, physics, chemistry, literature and peace.

The prize money this year is 12 million Swedish kronor (about $1.8 million), whether for an individual, small group of laureates or organisation.