The Royal Swedish Academy of Science announced on 11 October that Finn E. Kydland of Norway and Edward C. Prescott of the USA have been awarded the Nobel Prize in economics for 2004.
They have received the prize "for their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles."
Mr Kydland and Mr Prescott have made fundamental contributions to research in macroeconomics. The Laureates have analysed the design of economic policy and the driving forces behind business cycles in a highly innovative way. Their work has not only transformed economic research, but also profoundly influenced the practice of economic policy in general, and monetary policy in particular, according to the official Nobel Prize website (www.nobelprize.org). Here you can also read more about why the Laureates were awarded the prize and about their work.
Mr Kydland, born in 1943, is a Norwegian-American economist. He graduated from the Norwegian School of Economics and Business Administration in 1968 and received a Ph.D. in 1973 from Carnegie Mellon University in Pittsburg, USA, where he became professor in 1976. Mr Kydland shares the prize with Mr Prescott, born in 1940. Mr Prescott received a Ph.D. from Carnegie Mellon University in 1967 and is professor at Arizona State University and a researcher at the Federal Reserve Bank of Minneapolis.