American economists Robert E. Hall and Michael Woodford won the Nobel Memorial Prize in economics Monday for their work on models that have helped governments and central banks manage economic shocks, such as energy crises and inflation.

The Royal Swedish Academy of Sciences announced the winners in Stockholm, noting that their work created the theoretical foundation to better understand how consumers decide whether to save or spend, insights that make it easier for policymakers worldwide to stabilize economies after fluctuations.

“The laureates’ research has made it possible to manage major macroeconomic crises far more effectively than before,” the Nobel committee wrote in a paper explaining the economists’ work. “It has been hugely beneficial during the pandemic and the energy crises of recent years.”

Hall, 83, is affiliated with Stanford University in California. Woodford, who was born in 1955, is affiliated with Columbia University in New York.

For decades, governments responded to economic shocks by following the Depression-era prescriptions of the British economist John Maynard Keynes: Intervene in the economy by lowering interest rates and taxes and hiking government spending, thereby encouraging consumers and businesses to spend and invest and help restart growth.

Hall and Woodford, in separate contributions, set about improving the Keynesian model to take into account how consumers and businesses actually make decisions about whether to invest and spend.

Hall studied the way that consumers’ decisions about whether and how much to spend depend on what they expect their future income to be.

“If they are optimistic, they will consume more than if they are pessimistic,’’ the committee wrote. But consumer expectations can change unexpectedly as new information about the economy comes in. Hall found that forecasting future consumer spending is virtually impossible.

Woodford’s research established that businesses make decisions about prices based on where they think interest rates will go in the future.

Therefore, central banks such as the U.S. Federal Reserve, which set short-term interest rates, should provide “clear and credible communication about how they reason and what they plan to do.” Central banks have responded to this insight by working harder to explain what they are doing.

Woodford’s research also offered guidance on how central banks should respond to energy price shocks that can both feed inflation and send unemployment higher.

“Unlike the traditional Keynesian models, Woodford’s model recommends a cooling measure, such as increased interest rates, to avoid uncontrolled inflation,” the Nobel committee wrote. “His insight has made it possible to respond to recent supply shocks more effectively than during the oil crises of the 1970s.”

AUTOMOBILES

China’s car exports see big increase

China’s passenger car exports surged 64% in September from the same month in 2025, an industry association reported Monday, as Chinese automakers increasingly focus on exports to drive growth amid sluggish domestic sales.

China exported around 919,000 passenger vehicles in September, lifted by overseas demand for plug-in hybrids and pure electric vehicles, data from the China Association of Automobile Manufacturers showed. In the first nine months of 2026, China exported over 7.1 million passenger cars, up more than 70% from the same period last year.

Meanwhile, domestic passenger car sales in China fell for most of the year as automakers faced weaker consumer confidence at home and scaled-back government subsidies.

China is the world’s largest vehicle exporter but is facing increasing skepticism from trade partners who fear it’s undermining their domestic industries and trade balance.

EUROPE

EU sanctions 1,600 Russian people, firms

The European Union imposed sanctions on Monday on almost 1,600 Russian people and companies linked to Russia’s arms industry, notably targeting those suspected of involvement in making parts for drones and missiles.

In the biggest single listing of sanctions since the Kremlin launched full-scale war on Ukraine almost five years ago, the EU also targeted 77 people accused of organizing, working on, or running in “sham elections” in occupied parts of Ukraine.

Announcing the sanctions, EU foreign policy chief Kaja Kallas said that more than half of them “address the production chain for the ballistic missiles Russia uses to kill Ukrainian civilians every day.”

“This is not the time to ease pressure on Moscow but to increase it,” she said.

The EU said the companies are on a list established by the Russian government itself “that identifies them as belonging to the Russian military-industrial complex, and they are therefore entitled to receive subsidies.”

— Associated Press