News English | 2026 Nobel Prize in Economics Announced: Learn Inflation, Interest Rate and Boom and Bust

Prices keep going up, mortgage rates might rise again, and you're never sure if it's a good time to exchange money for a trip abroad… These everyday worries are all connected to the “big picture” economy. On October 12, 2026, the 2026 Nobel Prize in Economic Sciences was announced, shared by Robert E. Hall of Stanford University and Michael Woodford of Columbia University. Their research explains in depth how households and businesses make decisions when the economy changes, and it has shaped how modern central banks keep the economy steady and respond to inflation and economic shocks.

In this news English article, we use an original English story of about 200 words to help you read the Nobel Prize in Economics news in English, and we explain what inflation means along with other high-frequency financial news words such as interest rate and boom and bust. These words appear not only in international outlets like the BBC and CNN, but also in TOEIC Part 7 business passages and in workplace presentations.

Not interested in economics? That's fine. Once you know these few words, the next time you see an English headline about a central bank raising rates or inflation cooling down, you'll get the main point at a glance.

On Monday, October 12, two American economists won the 2026 Nobel Prize in Economic Sciences. Robert E. Hall of Stanford University and Michael Woodford of Columbia University will share the prize money of 12 million Swedish kronor, or about 1.2 million US dollars. It was the last Nobel Prize announced this year.

Their work helps explain why economies go through booms and busts, or periods of fast growth followed by slowdowns. Hall's research showed that people do not decide how much to spend based only on their current income. They also consider how much they expect to earn in the future. Woodford studied how companies set prices. Because changing prices often costs time and money, many businesses look ahead and choose prices that will work for a longer period.

Together, their ideas changed how central banks deal with inflation and unemployment. Their research also highlighted the importance of expectations and clear communication in monetary policy. Today, many central banks around the world use models built on this research when they set interest rates.

Woodford said the award came as a surprise. "It's a tremendous honor," he said at a press conference, according to Axios.

On Monday, October 12, two economists from the United States won the 2026 Nobel Prize in Economic Sciences. They are Robert E. Hall, who works at Stanford University, and Michael Woodford, who works at Columbia University. They will split the prize money: 12 million Swedish kronor, or about 1.2 million US dollars. This was the final Nobel Prize announced this year.

Their research helps us understand why an economy sometimes grows very quickly and then slows down. This pattern is called “boom and bust.” Hall found that when people decide how much money to spend, they don't just look at what they earn now. They also think about how much money they will probably earn later. Woodford looked at how companies decide their prices. Changing prices takes time and costs money, so many businesses plan ahead and pick prices that can stay the same for a long time.

Put together, their ideas changed the way central banks handle rising prices and people losing their jobs. Their work also showed that what people expect to happen, and how clearly central banks explain their plans, really matter. Today, many central banks around the world use models based on this research when they decide on interest rates.

Woodford said he did not expect to win. At a press conference, he said it was “a tremendous honor,” according to Axios.

1. economist (n.) a person who studies the economy
   • In the news: two American economists won the 2026 Nobel Prize
   • Example: The economist on TV said housing prices in Taipei may stay high next year.
   • Meaning: An economist on TV said Taipei housing prices may stay high next year.
2. share (v.) to divide something between people; to have or pay for something together
   • In the news: will share the prize money
   • Example: My roommates and I share the rent and the electricity bill every month.
   • Meaning: My roommates and I split the rent and the electricity bill every month.
3. boom and bust (phr.) a cycle of fast growth followed by a sharp fall; big ups and downs
   • In the news: economies go through booms and busts
   • Example: The bubble tea industry has seen a lot of booms and busts over the years.
   • Meaning: Over the years, the bubble tea business has gone through many big ups and downs.
4. slowdown (n.) a period when something grows or moves more slowly
   • In the news: periods of fast growth followed by slowdowns
   • Example: Our company stopped hiring because of the economic slowdown.
   • Meaning: Our company paused hiring because the economy was slowing down.
5. expect (v.) to think something will probably happen
   • In the news: how much they expect to earn in the future
   • Example: I expect to save enough money for my working holiday by next summer.
   • Meaning: My goal is to have enough saved for my working holiday before next summer.
6. set prices (phr.) to decide how much something will cost
   • In the news: Woodford studied how companies set prices.
   • Example: Night market vendors often set prices based on the cost of ingredients.
   • Meaning: Night market vendors usually decide their prices according to how much the ingredients cost.
7. look ahead (phr. v.) to think about and plan for the future
   • In the news: many businesses look ahead and choose prices…
   • Example: If you look ahead and book early, flights to Cebu are much cheaper.
   • Meaning: Planning early and booking ahead makes flights to Cebu a lot cheaper.
8. central bank (n.) a country's main bank, which controls its money supply and interest rates
   • In the news: how central banks deal with inflation and unemployment
   • Example: Taiwan's central bank decides whether to raise interest rates.
   • Meaning: Taiwan's central bank is the one that decides whether interest rates go up.
9. inflation (n.) a continuing rise in overall prices, so money buys less
   • In the news: deal with inflation and unemployment
   • Example: Because of inflation, a lunch box now costs almost NT$120.
   • Meaning: Prices have risen so much that a lunch box now costs nearly NT$120.
10. unemployment (n.) the state of not having a job; the share of people without jobs
    • In the news: deal with inflation and unemployment
    • Example: Youth unemployment is a big topic in many countries.
    • Meaning: Many countries are talking about young people who can't find work.
11. interest rate (n.) the percentage you pay to borrow money, or earn on money you save
    • In the news: when they set interest rates
    • Example: Higher interest rates mean my monthly mortgage payment will go up.
    • Meaning: When interest rates rise, I have to pay more on my mortgage each month.

Pattern 1: not … based only on A. S also … (not just A, but also …)

• Original: Hall's research showed that people do not decide how much to spend based only on their current income. They also consider how much they expect to earn in the future.
• Structure: a negative sentence + based only on + noun, then a second sentence with also to add another factor. This is a natural way to say “not just… but also…” and sounds more conversational than not only… but also….
• Try it: I don't choose a language school based only on price. I also think about class size and location. (Price matters, but so do class size and location.)

Pattern 2: Because / Since + reason clause, main clause (because…, so…)

• Original: Because changing prices often costs time and money, many businesses look ahead…
• Structure: Both Because and Since can put the reason at the start of the sentence, followed by a comma and then the result. Note that in English you can't use because and so together. Since is slightly softer and is often used for a reason everyone already knows.
• Try it: Since the yen is weak right now, many Taiwanese people are traveling to Japan. (The weak yen is the reason so many people are visiting Japan.)
• Tip: When a gerund phrase is the subject (changing prices), the verb is singular: costs.

Pattern 3: S + highlight(s) / highlighted + the importance of + N / V-ing (to show how important something is)

• Original: Their research also highlighted the importance of expectations and clear communication in monetary policy.
• Structure: highlight means “to draw attention to” or “to emphasize”; the importance of is followed by a noun or a gerund. Here the sentence describes what the research means, not a personal policy recommendation from the researchers.
• Try it: The meeting highlighted the importance of confirming deadlines with clients. (The meeting showed why it matters to check deadlines with clients.)

Scene: Coworkers Amy and Kevin talk about their travel budgets during their lunch break.

• Amy: Did you see the news? Two economists just won the Nobel Prize.
• Kevin: Yes! Their research is about inflation and interest rates, right?
• Amy: Right. Speaking of inflation, everything is getting so expensive. I'm worried about my trip to Australia next year.
• Kevin: Then you should look ahead and exchange some money when the rate is good.
• Amy: Good idea. I also expect hotel prices to go up during the holidays.
• Kevin: Hotels set prices based on demand, so booking early really helps.
• Amy: Maybe I'll share a room with a friend to save money, too.
• Kevin: Smart. That way, you won't feel the slowdown in your wallet!

After reading the news story and the vocabulary, try the 4 questions below. Choose an answer and confirm it to see the explanation.

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• Prize in Economic Sciences 2026 — Press release: official Nobel press release, October 12, 2026.
• The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel: official Nobel overview of the prize.
• Two Americans win Nobel Prize in economics for work on boom-bust cycles: NPR (Scott Horsley), republished by OPB, 2026-10-12
• U.S. economists win Nobel for work on managing economic shocks: Axios (Courtenay Brown), 2026-10-12
• Nobel economics prize awarded to Robert Hall and Michael Woodford: Al Jazeera, 2026-10-12