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Michael Woodford

Ariél Pakes

For “advancing the New Keynesian approach to understanding economic fluctuations in general equilibrium, bridging the theory and the practice of monetary policy, and incorporating bounded rationality in macroeconomics.”

Michael Woodford received the Erwin Plein Nemmers Prize in Economics, honored for his achievements “advancing the New Keynesian approach to understanding economic fluctuations in general equilibrium, bridging the theory and the practice of monetary policy, and incorporating bounded rationality in macroeconomics.” He is the John Bates Clark Professor of Political Economy at Columbia University.

Woodford has worked extensively on macroeconomic modeling, focusing in particular on the role of expectations and alternative models of expectation formation in the propagation of economic disturbances, and in the effects of alternative monetary policies. His most important work is the treatise Interest and Prices: Foundations of a Theory of Monetary Policy, which shows how dynamic stochastic general equilibrium models can be used for monetary policy analysis, and provides theoretical foundations for inflation targeting. He is also co-author or co-editor of several other volumes, including a three-volume Handbook of Macroeconomics (with John B. Taylor), a two-volume Handbook of Monetary Economics (with Benjamin M. Friedman), The Inflation Targeting Debate (with Ben S. Bernanke), and the textbook International Macroeconomics (with Stephanie Schmitt-Grohé and Martin Uribe).  His current research focuses on implications of bounded rationality for economic analysis, drawing upon findings in cognitive psychology and neuroscience, with particular emphasis on the consequences of decisions based on imprecise mental representations. 

The members of the 2024 Nemmers Prize Selection Committee were George Marios Angeletos, Northwestern; Guido Lorenzoni, University of Chicago; and Ricardo Reis, London  School of Economics.