The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2004
Finn E. Kydland, Edward C. Prescott
Finn E. Kydland
Born: 1 December 1943, Gjesdal, Norway
Affiliation at the time of the award: Carnegie Mellon University, Pittsburgh, PA, USA, University of California, Santa Barbara, CA, USA
Prize motivation: "for their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles"
Contribution: Showed that economic policies are often plagued by problems of time inconsistency. Demonstrated that society could gain from prior commitment to economic policy. Introduced new ideas about economic policy design and the driving forces behind business cycles.