Kydland, born in 1943 in Norway, earned his Ph.D. at Carnegie-Mellon University. In 1978 he joined the faculty of Carnegie-Mellon University. Kydland is now the director of the Laboratory for Aggregate Economics and Finance as well as a professor in the Department of Economics, at the University of California, Santa Barbera. Kydland has authored many publications on macroeconomics, economic growth, monetary economics and international economics.
In 2004, Kydland shared the Nobel Memorial Price in Economics with Professor Edward C. Prescott. They were given this award “for their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles". (The Nobel e-Museum)
Kydland’s areas of expertise are economics in general and political economy. His main areas of teaching and interest are business cycles, monetary and fiscal policy and labor economics. A highly influential component of Kydland's research focuses on the time-consistency problem in monetary policy: policymakers may wish to restrain inflation in the long run by raising interest rates, but political constraints make them reluctant to bear the short-term costs of doing so. Kydland and Prescott's work in this area has led to a move towards greater independence of the monetary authorities from the political process in a number of countries.
Kydland is also an Adjunct Professor at the Norwegian School of Economics and NHH. Since 1992 he has been a Fellow of the Econometric Society.