The prestigious award, formally known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is the final prize to be given out this year and is worth 12 million Swedish crowns ($A1.7 million).
The two laureates developed new macroeconomic models that improved our ability to implement effective stabilisation policy, enabling well-timed fiscal and monetary policy measures that can reduce the intensity of damaging swings 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," John Hassler, Chair of the Committee for the Prize in Economic 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."
The economics prize, first awarded in 1969, is not one of the original five awards created in the 1895 will of industrialist and dynamite inventor Alfred Nobel, but was established by Sweden's central bank.
The majority of previous laureates have been from the United States. Only three women have ever won, most recently Claudia Goldin in 2023 for work on how gender has affected pay and employment over time in the United States.
Analysis by the Institute for Scientific Information, part of Clarivate, had picked researchers working on monetary policy, the economics of information technology and evolutionary economic theory as possible recipients.
Last year's winners, Joel Mokyr, Philippe Aghion and Peter Howitt, won for work on "creative destruction" and how new technology and production methods can boost growth and living standards.
The Nobel prizes for medicine, physics, chemistry, literature and peace were announced last week.
