When Michael Woodford '80 J.D. arrived at Yale in 1977 as a first-year law student, he had never taken an economics course in his life and was not particularly interested in the field.
And then classes started.
At the time, Yale Law School had taken a pioneering approach to incorporating economics into legal studies. Nearly every class Woodford took - courses on antitrust law, tort law, constitutional theory, bankruptcy law, corporate finance - required some level of economic analysis.
"I very quickly realized that it was valuable to know how to deploy economic reasoning," he recalled recently.
That realization became a passion that has taken Woodford, now the John Bates Clark Professor of Political Economy at Columbia University, to the pinnacle of scholarly economics. Earlier this month, he shared the Nobel Memorial Prize in Economic Sciences with Robert E. Hall of Stanford University for their decades of work developing models that help central banks and governments maintain economic stability amid boom-and-bust cycles.
Ask Woodford if anyone at Yale influenced his academic career, and he'll reel off a list of current and former faculty members, including a former president of the university.
He encountered economic thought in law courses taught by then-Yale professors Robert Bork and Marvin Chirelstein, and current professors Owen Fiss, Bruce Ackerman, and Anthony Kronman. He cites Henry Hansmann, the Oscar M. Ruebhausen Professor Emeritus of Law, as an especially important influence.
"Henry, who has a Ph.D. in economics along with his law degree, convinced me that economists study questions in interesting ways," Woodford said. "I thought it would be interesting to learn more about approaching the world that way."
Woodford's interest in economics continued to deepen, and so he began to also enroll in courses offered through the Department of Economics and the Yale School of Management, including an intermediate microeconomics course taught by Richard Levin, who would later serve as Yale's 22nd president (from 1993 to 2013).
"That's one of the best classes in anything that I've taken in my life," Woodford said. "Rick taught with such clarity. I only realized later that many of the concepts he taught us were very advanced for what was presented as sort of an introductory course. It was sophisticated stuff."
As a student, Levin recalled, Woodford was a standout.
"Mike Woodford was the top student in an intermediate microeconomics class that was loaded with talented students, among them a future Sterling Professor and a future Senior Fellow of the Yale Corporation," he said. "I have long been grateful that I contributed to Mike's decision to become an economist, and I am thrilled that his extraordinary achievements have been recognized with the Nobel Prize."
As a Yale student, Woodford also served as a research assistant to mathematical sociologist Scott Boorman, a professor of sociology and himself a Yale Law graduate.
"That was the first time I used a computer as a research tool," Woodford said. "He was someone who believed very strongly in using sophisticated technical tools to illuminate social phenomena, and I think that had a lot of influence on me. He certainly encouraged me to get deeper into understanding social processes."
Woodford's experience on campus is in keeping with the law school's long tradition of encouraging faculty and students to explore disciplines beyond the law, said Guido Calabresi, Sterling Professor Emeritus of Law and a founder of the field of law and economics, who served as dean of the law school from 1985 to 1994.
"The school is guided by the notion that to understand the law, you have to understand other fields," said Calabresi, who didn't teach Woodford, but recalls him as a student and remains in touch with him. "Some do law and economics, some do law and history, some do law and anthropology, and some do law and literature. Some of the ablest people on the faculty during the time that Mike was here were highly trained in economics. And I remember Mike as someone who was really taking advantage of everything Yale has to offer."
After graduating from Yale Law School, Woodford earned a Ph.D. in economics from the Massachusetts Institute of Technology.
In the years since, Woodford conducted influential research on monetary policy. In awarding the Nobel to Woodford and Hall this month, the Nobel committee noted their pioneering research into how economic models can be reconstructed to revitalize stabilization policy. In their work, they explored the ways in which the totality of individuals households and businesses affect the larger economy through their actions.
"A central component in [their] models is that households and businesses are forward looking when making decisions about savings or product prices," the Nobel committee wrote. "When governments and central banks communicate their plans for economic policy, they can influence this view of the future and move the economy in the right direction. Since the new models' introduction, they have been extremely helpful in dealing with the economic downturns that have affected us."
The newly minted Nobel laureate fondly recalls his days as a law student.
"I still look back on it as a sort of paradise," he said. "Something that was exciting about being at the law school was the sense the faculty conveyed of being free to explore ideas in all kinds of directions. They were intellectually curious people. Disciplinary boundaries seemed to mean nothing to any of them and that was very inspiring.
"I've certainly enjoyed devoting myself to intellectual pursuits, but, to some extent, I've never been in a setting where a feeling of intellectual freedom pervaded the atmosphere the way it did at Yale Law School."
