I think of Michael Woodford as an economist who studies something very specific and tries to get it right. But in his case he did not study something small and irrelevant, he studied “monetary policy.”
I consider him an economist who put monetary policy and “monetarism” – generally understood – back on the map by mixing it with modern theory and also a modern approach to expectations. Think of monetarism as a world in which interest rates and not the amount of money are central to central bank policy. In the world there is some nominal stickiness, and central banks can help to stabilize output without opening the foul of Lucas criticism or other problems with the previous Keynesian approach. He helped enable and create what macroeconomics called the “neoclassical-Keynesian synthesis” and also the New Keynesian model. His seminal early paper came in 1997 with the now deceased Julio Rotemberg.
Expectations are critical in his model, and you can think of people as the underlying source for the approach to “advance guidance” in the world of central banks. He also showed how the central bank can (potentially) force out of the zero lower bound by “irresponsibly” wanting to inflate.
It is wrong to think that Woodford is nominally “approving” targeting gdp, but he shows that it can be optimal and the overall work has encouraged interest in that approach, much-discussed on this blog and elsewhere, most of all by Scott Sumner, a great admirer of Woodford’s.
He wrote the 2003 book Interests and Prices: Foundations of Monetary Policy Theory, note the title is taken from Wicksell, which I think is ambitious. His work is very careful and precise, and when you read it, you get the feeling that he has thought about every question for years.
Here is Stockholm about the contribution of Woodford and Hall. Here is Michael at scholar.google.com. Here is Alex at Michael Woodford.