As this year’s Nobel season draws to a close, two prizes have commanded particular attention: one in economic sciences and the other for peace. At first glance, they appear to inhabit different universes. The former belongs to the intricate world of inflation, interest rates, and government policy; the latter to the fraught realms of war, justice, and human rights. Yet, a single, vital thread connects them. Societies, markets, and the global order function on the bedrock of rules, expectations, and trust. When that foundation crumbles, the loss is measured not merely in numbers and rubble, but in shattered futures.
The Royal Swedish Academy of Sciences recently awarded the 2026 Nobel Memorial Prize in Economic Sciences to Robert E. Hall and Michael Woodford for their work on the “microeconomic foundations of macroeconomic stabilisation.” The phrase sounds daunting, but the underlying idea is elegantly simple: keeping a nation’s economy stable cannot rely on grand, top-down theories alone. True balance is achieved only by accounting for the myriad small and large decisions made daily by millions of households and firms—the very core of the laureates’ pioneering work. Hall, 83, of Stanford University, and Woodford, 70, of Columbia University, share the roughly $1.2 million prize. Notably, this award was not among the original five prizes established by Alfred Nobel’s 1895 will, but was later instituted by Sweden’s central bank.
Consider a simple example: when a family decides whether to buy a new refrigerator, it does not look solely at today’s salary. It weighs whether the job will survive next year, whether loan instalments will rise, and whether the cost of vegetables and fuel will spike. Similarly, a shopkeeper estimates tomorrow’s costs and demand before setting today’s prices. In short, present-day spending and pricing rest entirely on expectations about the future. Giving this forward-looking dimension of the economy a firm, quantifiable footing became the hallmark of Hall and Woodford’s research. As Nobel committee chair John Hassler noted, their work has provided a stable theoretical foundation for the models central banks and governments worldwide rely on today.
For a country like India, this research offers two distinct lessons. The first stems from Hall’s work, which enables governments to identify precisely how many households live “hand to mouth,” with consumption wholly dependent on current income. Economic shocks hit these families the hardest, making their accurate identification crucial for effective policy. Today, India provides free food grains to over 810 million people. However, the basis of this arrangement relies on estimates made 13 to 15 years ago. Over the past decade and a half, India’s population, urbanisation, income structure, and employment patterns have shifted dramatically. A scheme built on outdated data risks failing the truly needy while inadvertently benefiting those who no longer require assistance. Leveraging modern data to identify genuine need would make government subsidy spending far more precise and effective—a matter of urgent importance in an era of fiscal constraints. Those working in rural and tribal areas know this reality intimately: too often, the genuinely needy are left off the lists, while those who appear comfortable on paper find their way in.
The second lesson emerges from Woodford’s work, which clearly demonstrates how heavily firms weigh their future expectations when setting present prices. In India, the Purchasing Managers’ Index (PMI) captures this to some extent by measuring private-sector expectations for the coming months. However, there is a pressing need for a comprehensive government survey that consistently measures long-term economic expectations. Such data would be invaluable to the central bank when calibrating interest rates, and to the government when navigating supply shocks.
The most political lesson of this research lies in the communication of policy. People and firms behave according to their expectations of the future. Therefore, clearly articulating what decisions the government has taken, what it intends to do next, and the direction it is headed is, in itself, a powerful policy instrument. When medium-term policy offers clarity and certainty, households and firms feel secure in their economic decisions. With few exceptions, the Government of India’s record on this front has been weak, a vulnerability repeatedly exposed during the rollout of the farm laws, the labour codes, and the Citizenship (Amendment) Act. Even when a policy is fundamentally sound, a failure to explain it properly to the public breeds confusion, distrust, and uncertainty. And uncertainty is the economy’s greatest enemy.
This same principle applies to the current global situation. The framework laid out by the economics laureates reminds us that the war in West Asia is not confined to the tragic loss of life and destruction of property. When the future looks dim and uncertain, the effect is immediately felt in today’s prices, investments, and spending. Through fuel prices, freight costs, and disrupted supply chains, the blow reaches the ordinary family’s kitchen. We may feel the war is being fought far away, but its heat reaches our doorstep through the prices in our local markets.
Navi Pillay
Now, let us turn to the second prize. On October 9, 2026, in Oslo, the Norwegian Nobel Committee announced the Nobel Peace Prize for the South African jurist Navanethem Pillay, better known as Navi Pillay, for her efforts to promote peace and international law. The committee noted that a single common thread runs through her career, from defending Nelson Mandela and other anti-apartheid activists to serving as a judge in international judicial proceedings. Committee chair Jørgen Watne Frydnes rightly called her one of the leading defenders of international legal principles.
Looking at Pillay’s life, the selection feels profoundly fitting. Born in 1941 in Durban to a family of Indian Tamil descent, she grew up under apartheid. In such a system, simply becoming a lawyer was a monumental challenge for a non-white girl. Nevertheless, in the 1960s, she established her own law practice, fiercely defending anti-apartheid political prisoners and activists, including Mandela, who was imprisoned on the notorious Robben Island. She eventually became the first non-white woman to serve as a judge on South Africa’s High Court.
Her work later expanded to the international stage. She served on the International Criminal Tribunal for Rwanda and the International Criminal Court (ICC). During the Rwandan war crimes trials, she played a pivotal role in drafting the historic 1998 judgment against local politician Jean-Paul Akayesu. That judgment established a groundbreaking principle: recognizing that rape and sexual violence can themselves constitute acts of genocide, forever changing how the law addresses atrocities committed against women in war. She later served as the United Nations High Commissioner for Human Rights and chaired the UN’s independent international commission of inquiry on the Occupied Palestinian Territory. Last year, that commission concluded that Israel had committed genocide in Gaza—a finding Israel vehemently rejected as “scandalous.” The commission also noted that Prime Minister Benjamin Netanyahu and former Defence Minister Yoav Gallant had “incited genocide” through their speeches and statements.
The Nobel Peace Prize has always courted controversy. Barack Obama, who received it in 2009, oversaw the bombing of Libya two years later. The 2025 prize went to Venezuelan opposition leader María Corina Machado, who supported the economic siege Washington imposed on Venezuela and the illegal attacks on boats in the Caribbean. Against this backdrop, many argue that Pillay’s selection restores credibility to the committee, given her spotless record of standing with the victims of international crimes. While such controversies are an indelible part of the prize’s history and opinions will inevitably differ, Pillay’s award represents a vital reaffirmation of principle.
Reactions were swift following the announcement. Pillay dedicated the award to all survivors of international crimes. When the audience erupted in applause, she joked lightheartedly that if she received any more, she would have to share the prize with Donald Trump. For his part, US President Trump took to social media to claim the committee had diminished the prize’s prestige by awarding it to Pillay. On the very same day, the White House imposed further sanctions on the ICC. These two scenes expose a stark contradiction within a single event: on one side, joy at the honouring of the law; on the other, direct political pressure on the very institutions that uphold it.
Pillay’s honour arrives at a time when the rules-based international order feels acutely under threat. Russia’s invasion of Ukraine continues to challenge the fundamental principles of sovereignty and territorial integrity. Israel bombs Gaza, Syria, and Lebanon with impunity while tightening its grip on Palestinian territories. Meanwhile, the United States, under President Donald Trump—who has frequently expressed his desire for the Nobel—escalated tensions by initiating a war against Iran on February 28, resulting in the death of that country’s supreme leader, an open violation of international law and norms. Institutions such as the ICC have been fiercely attacked and sanctioned. While geopolitical narratives differ from country to country, the reality of the mounting pressure on international institutions is undeniable.
Larger Meaning
What, then, is the larger meaning of all this? International laws and institutions are what keep the world from descending into a “Hobbesian jungle.” The phrase, drawn from the 17th-century philosopher Thomas Hobbes, warns that without rules and a shared authority, society becomes a place where the strongest do whatever they wish. Laws and institutions matter precisely because they hold even the powerful to account. They are not perfect, and their enforcement often reveals limitations and double standards. But without them, weak nations and ordinary people are left with no protection. This matters profoundly for a country like India, whose strength lies less in military dominance than in its commitment to a rules-based order, robust trade, and principled diplomacy.
Let us return to the question we began with: what is the link between economics and peace? Hall and Woodford teach us that for an economy to remain stable, people need trust and clarity about the future. Pillay’s life demonstrates that for the world to remain stable, there must be trust that rules will apply equally to everyone. In both arenas, certainty, transparency, and accountability are the lifeblood of progress. When policies are imposed suddenly and without explanation, uncertainty festers in the market. When international rules are trampled by force, uncertainty engulfs the world. In both cases, the price is paid by ordinary people—sometimes in the form of inflation, and sometimes in the form of war.
For India, this offers concrete directions. To set the targets of social schemes, we need up-to-date, reliable data so that help reaches those who truly need it. We need long-term surveys that measure public and corporate expectations about the future. We need open, clear communication with the public before and after major policy changes. And we need a clear, consistent diplomatic position standing with the voices that strengthen the rule of law globally.
The Peace Prize will be presented in Oslo on December 10, the anniversary of Alfred Nobel’s death. What the global atmosphere will be like by then, no one can say with certainty. But this year’s two prizes have made one thing abundantly clear: a peaceful, stable, and just world does not come about on its own. It must be built through accurate information, transparent policies, and rules that apply equally to all. That requires the contributions of everyone—from university researchers to judges fighting for the victims of war, alongside the watchful, unwavering attention of ordinary citizens like us.
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*Contact: vikasmeshram04@gmail.com
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