Finn E. Kydland

Finn Erling Kydland was born on December 1, 1943, in the municipality of Gjesdal, in southwestern Norway. He was raised in this area and grew up with an interest in economic issues, calculating the effects of different policies from an early age, which spurred his journey into the field of economics. His background and education in Norway laid the groundwork for his future contributions to macroeconomic theory.

Finn E. Kydland completed his Ph.D. in Economics at Carnegie Mellon University in 1973. His doctoral dissertation focused on the application of dynamic programming models in economic policies. This foundational work allowed Kydland to pursue research in business cycles and macroeconomic theory, contributing to his later success as a world-renowned economist and a Nobel Laureate.

In 1977, Finn E. Kydland and Edward C. Prescott published their seminal paper 'Rules Rather than Discretion: The Inconsistency of Optimal Plans'. This influential work introduced the concept of time inconsistency in economic policy, showing how policymakers' discretion could often lead to suboptimal outcomes compared to following predetermined rules. The paper has had a profound impact on the way economists and policymakers think about central banking and monetary policy, underlining the importance of credibility and commitment in economic policy frameworks.

In 1982, Finn E. Kydland and Edward C. Prescott published another groundbreaking paper titled 'Time to Build and Aggregate Fluctuations'. This work introduced the real business cycle theory, which emphasizes the role of real (rather than monetary) shocks in driving economic fluctuations. The model they proposed incorporated technology shocks and demonstrated how these shocks could propagate through the economy over time, leading to cyclical patterns in economic activity.

In 2001, Finn E. Kydland was appointed as the Jeffrey Henley Professor of Economics at the University of California, Santa Barbara (UCSB). This position allowed him to continue his research in macroeconomics while also mentoring students and engaging in academic administration. Kydland's presence at UCSB bolstered the university's reputation in the field of economics, bringing his wealth of knowledge and experience to the institution.

On October 11, 2004, Finn E. Kydland, along with Edward C. Prescott, was awarded the Nobel Prize in Economic Sciences for their contributions to dynamic macroeconomics, particularly the time consistency of economic policy and the driving forces behind business cycles. Their pioneering work provided deep insights into the roles of policy rules versus discretion, and the effects of economic policies on the fluctuations of business cycles, influencing both theory and practical policy extensively.

In 2006, Finn E. Kydland founded the Laboratory for Aggregate Economics and Finance (LAEF) at the University of California, Santa Barbara. LAEF's mission is to support research on the aggregate levels of economics, focusing especially on emerging macroeconomic issues and the analysis of economic policies. Under Kydland's leadership, the lab has conducted vital research that informs both economic theory and policy discussions.

In September 2018, Finn E. Kydland was awarded an honorary doctorate by the University of Zurich in recognition of his outstanding contributions to economic research, particularly in the areas of macroeconomic theory and policy formation. This honor reflects his impact on economics globally and serves as an acknowledgement of his work influencing economic thought and policy internationally.

In October 2019, Finn E. Kydland was awarded an honorary doctorate from the NHH Norwegian School of Economics. This distinction was given in recognition of his exceptional contributions to the field of economics, particularly his work on business cycles and monetary policy. The honor underscores the global recognition of Kydland's influential research and theoretical advancements in the discipline of economics.