Finn Kydland and Edward Prescott were awarded the Bank of Sweden Prize in Economic Science in Memory of Alfred Nobel for 2004 for their work in “time-consistent policy and the generation of the business cycle”.

As is the case with these awards, the contributions of these men have long ago been absorbed by the academic community. The primary effect of awarding these prizes is to confer prestige on the winners, encouraging further work in a particular area, and enhancing the value of their opinions in the public media.

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