Kydland, Finn Erling (1943– )

Norwegian economist. He received the 2004 Nobel Prize in Economics for his research on business cycles and time consistency in macroeconomic policy, an award he shared with US economist Edward C Prescott.

An influential feature of his work was the relationship between politics and economic policy. He argued that governments aiming to restrict inflation are reluctant to raise interest rates because of the short-term political costs. His work helped foster the shift of fiscal policy-makers in several countries away from the political process.

He grew up in Gjesdal in the county of Rogaland in southwestern Norway. He earned his bachelor's degree from the Norwegian School of Economics in 1968 and his PhD in economics from Carnegie Mellon University, in Pittsburgh, Pennsylvania, in 1973. He returned to the Norwegian School of Economics as an assistant professor 1973–78, then went back to Carnegie Mellon, where he was on the economics faculty of the Tepper School of Business 1978–2004, before joining the faculty of the University of California, Santa Barbara, in 2004. Articles written with Prescott include ‘Rules Rather than Discretion: The Inconsistency of Optimal Plans’ (1977), which described the harmful effects of short-term political motivations on monetary policy, and ‘Time to Build and Aggregate Fluctuations’ (1982), which established a model for business cycles, illustrating the phenomenon of fluctuations in long-term economic growth.