The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2004
Finn E. Kydland, Edward C. Prescott
Edward C. Prescott
Born: 26 December 1940, Glens Falls, NY, USA
Affiliation at the time of the award: Arizona State University, Tempe, AZ, USA, Federal Reserve Bank of Minneapolis, Minneapolis, MN, 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.