Kydland, Finn Erling (1943–)
Finn Kydland’s contributions to economics science have changed the terms of the debate in two important and related counts: the theory of policymaking and of business cycles. In his Ph.D. dissertation, Finn showed that a complex ‘credibility problem’, inherent to the policymaking process, prevented the evaluation of economic policies with the optimal control theory techniques applied until then. His work with Edward Prescott on business cycles identified supply shocks as one of the primary causes of economic fluctuations, with the counter-intuitive and therefore resisted implication that the perfect smoothing of the business cycle may not be a sensible policy objective.
KeywordsAssignment problem Bellman’s principle of optimality Business cycles Friedman, M. Keynesianism Kydland, F. Lucas, R. Monetarism Monetary shocks Neoclassical growth theory Norwegian School of Economics and Business Administration Optimal control theory Output-consumption correlation puzzle Phillips curve Prescott, E. Rules vs. discretion System-of-equation approach Targets Technology shocks
- Njølstad, O., E. Steigum, and T. Thønstad. 2006. Conversation with Finn Kydland. In Norske Nobel prisvinnere, Fra Bjornson til Kydland [Norwegian Nobel laureates: From Bjørnson to Kydland], ed. O. Njølstad. Oslo: Universitetsforlaget.Google Scholar
- Prescott, E. 2005. The transformation of macroeconomic policy and research. Nobel Prize lecture. In Les Prix Nobel. The Nobel Prizes 2004, ed. T. Frängsmyr. Stockholm: Nobel Foundation . Online. Available at https://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2004/prescott-lecture.pdf. Accessed 27 June 2006.
- Thore, S. 2005. The Road to the nobel: A travelogue and retrospect on the occasion of Finn Kydland receiving the Nobel Prize in economics on December 10, 2004. Online. Available at http://people.stern.nyu.edu/dbackus/3386/2004/Thore%20on%20Kydland%20Nobel%20Feb%2005.doc. Accessed 1 July 2006.
- Woodford, M. 2003. Interest and prices: Foundations of a theory of monetary policy. Princeton: Princeton University Press.Google Scholar