- 2004 Nobel Prize in Economics
Intro
Norwegian economist known for his contributions to business cycle theory. He is the Henley Professor of Economics at the University of California, Santa Barbara. He was a co- recipient of the 2004 Nobel Prize in Economics, with Edward C. Prescott, "for their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business".
Education and Work Experience
1973, Ph.D. in Economics, Carnegie Mellon University
1977-2004, Associate Professor, Professor of Economics, Carnegie-Mellon University
2005-Present, Jeffrey Henley Professor of Economics at University of California, Santa Barbara
Honors and Awards
1992, Fellow of American Econometric Society
2004, Nobel Prize in Economics
2004, Member of Norwegian Academy of Science and Letters
Major Academic Achievements
Professor Kydland is a representative scholar of the real business-cycle theory of neoclassical macroeconomics. The real economic cycle theory pioneered by Professor Kydland and Professor Prescott is considered to be one of the most noticeable developments in macroeconomics
in the past 20 years. Their another great contribution was to introduce game theory into macroeconomics for the first time and to study the time consistency of macroeconomic policies. Kydland first rose to fame in the economics community in 1977, after publishing a paper, co- authored with Edward Prescott, called “Rules Rather than Discretion, the Inconsistency of Optimal Plans.” In this paper, Kyland and Prescott outlined their theory of the time consistency problem in macroeconomics. The theory argues that because economic policy is instituted over time, some economic policy commitments are more credible than others. According to economist Guido Tabellini, this idea “was so important and powerful to open up a whole new line of research in macroeconomics, that changed the way in which we study and implement economic policy. Rarely has a single paper had such a profound effect on economic research and on the practice of economic policymaking.”