Two American economic professors won the Nobel Prize in Economic Sciences on Monday for a development that reconstructed stabilization policy on microeconomic measures, which the committee said has helped “smooth out the economy’s peaks and troughs.”

The Royal Swedish Academy of Sciences awarded the prize to economists Robert E. Hall and Michael Woodford, of Stanford University and Columbia University, respectively. The academy said its work has helped governments better deal with sudden economic shocks and crises, with its models challenging Federal Reserve policies in recent years.