Finn E. Kydland, Tepper School of Business, Carnegie Mellon

Edward C. Prescott, Federal Reserve Bank of Minneapolis

Original Papers

Kydland, F. and E. Prescott (1977), “Rules rather than discretion: The inconsistency of optimal plans”, Journal of Political Economy 85, pp. 473-490.

Kydland, F. and E. Prescott (1982), “Time to build and aggregate fluctuations”, Econometrica 50, pp. 1345-1371.

Other Articles and Books

The time-consistency problem is by now a well established element of macroeconomic analysis. Good expositions can be found in any intermediate textbook, see e.g. O. Blanchard, Macroeconomics, Prentice-Hall, 2000, ch. 25.

A good presentation of the Laureates contribution to business cycle theory is given in C. Plosser, “Understanding Real Business Cycles”, Journal of Economic Perspectives 1989, no. 3, pp. 51-77.

For a discussion emphasizing methodological aspects, see F. E. Kydland and E. C. Prescott, “The Computational Experiment: An Econometric Tool”, Journal of Economic Perspectives 1996, no. 1, pp. 69-85.