Kydland, Finn Erling (1943-…), is a Norwegian economist and professor who won the 2004 Nobel Prize in economic sciences. He shared the award with the American economist Edward C. Prescott. They received the award for their studies of economic policy and business cycles. A business cycle is the pattern of business activity in an economy. Kydland’s work has greatly influenced the field of macroeconomic research—that is, research dealing with the economy as a whole.
In their 1977 article “Rules Rather than Discretion: The Inconsistency of Optimal Plans,” Kydland and Prescott identified problems in the ways that governments develop and implement economic policies. The two economists described a time consistency problem that takes place when policymakers abandon previous economic plans that people had expected would continue in the future. In their 1982 article “Time to Build and Aggregate Fluctuations,” they examined how technological advances and other factors cause fluctuations (upward and downward movements) in business cycles.
Kydland was born on Dec. 1, 1943, in Gjesdal, Norway. In 1968, he earned a bachelor’s degree from the Norwegian School of Economics and Business Administration. He came to the United States, where, in 1973, he received a Ph.D. in economics from Carnegie Mellon University in Pittsburgh, Pennsylvania. He has taught at the Norwegian School of Economics and Business Administration, Carnegie Mellon University, and the University of California at Santa Barbara.
