STOCKHOLM, Oct 12 — American economists Robert Hall and Michael Woodford were awarded the Nobel economics prize today for their work on how monetary and fiscal policy can help stabilise fluctuations in the economy.

“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,” the jury at the Royal Swedish Academy of Sciences said in a statement.

“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,” John Hassler, chair of the prize committee, said in the statement.

During the oil crises in the 1970s, the existing Keynesian models long used to determine when and how measures should be implemented to tackle recessions or other economic fluctuations no longer worked.