Robert E Hall and Michael Woodford have been awarded the economics Nobel for their contributions to understanding how governments and central banks respond to economic shocks
The oil-price shocks of the 1970s triggered stagflation and challenged economic theory
The resulting research helped shape modern approaches to managing inflation and business cycles
The independence of central banks, a cornerstone of modern economic management, faces growing political pressure, raising concerns about their ability to maintain stability
Traditional stabilisation models assume economic disruptions are temporary
But persistent price volatility and structural changes challenge the idea of returning to a stable equilibrium
Geopolitical tensions, energy transitions and artificial intelligence are reshaping economies, exposing the limitations of conventional macroeconomic stabilisation tools
The era of predictable economic cycles is fading
Policymakers need new frameworks grounded in production, consumption and investment to navigate increasingly complex disruptions