Economics Professor and UCSB’s latest Nobel Prize recipient Finn Kydland did not let a business trip in Norway stop him from making a call to Santa Barbara to express his gratitude and excitement to faculty and students Tuesday morning.
In a teleconference hosted by Chancellor Henry Yang, Kydland was recognized for his research on business cycles and macroeconomic policy. About 50 UCSB faculty members and media associates crowded into the Faculty Club to listen to Kydland speak via telephone over a public address system.
Kydland, who was hired by UCSB in July, shares the 2004 Nobel Prize in Economics with Edward Prescott of Arizona State University. Even in the face of his overwhelming achievement, Kydland said he still looks forward to the far less celebrated task of teaching intermediate economics in the winter.
“I hope I can make a contribution in some way to my students. I became excited about economics while I was an undergrad. I took an advanced seminar from someone who was really excited about the topic,” Kydland said. “I think it’s really important to do what you really love to do, and I’d be happy if I could have that impact on even a handful of students.”
Kydland and Prescott conducted the research that won them the Nobel Prize several years ago. Now, Kydland said, he’s not sure where he will focus his attention.
“I’m going to continue to look for interesting questions to address,” Kydland said. “I’m not wed to a particular approach or type of question.”
Economics Dept. Chair Peter Kuhn said the department was “pleased as punch” to hear the news of the award because of the real world application of the research.
“The contributions of Kydland and Prescott were to increase the understanding of business cycles,” Kuhn said. “They’re respected within the profession because their ideas had an impact on monetary policy in the real world.”
One of the main goals of his research is to make economic theory easier for everyone, Kydland said.
“I want to continue to make the dynamics of complicated phenomenon understood better,” Kydland said. “Uncertainty should be unnecessary – policymakers should make it transparent.”
Jeff Henley, chairman of the board of Oracle Corporation and the UCSB alumnus who established the professorship in economics now held by Kydland, said it is important to view economics from a global perspective.
“The more we can improve sound economic theory, the more we can raise global living standards,” Henley said. “That’s what it’s about, trying to make the world a bigger and better place.”
Dean of Social Sciences Melvin Oliver also commented on the real world applications of Kydland’s research.
“[Kydland’s] work demonstrates the power of the social sciences,” Oliver said. “We can improve on allowing financial institutions freedom from political affairs so we can [create] true fiscal security.”
UCSB was privileged to have Kydland on staff before he won the Nobel Prize, Yang said.
“[Kydland] is an outstanding scholar of dynamic macroeconomics,” Yang said. “We’re honored just to have him teach in Winter 2004.”
Kydland said he is excited to return to Santa Barbara and begin teaching.
“I think it will be very exciting to try to build up a department already so strong in macroeconomics,” Kydland said. “If I can help to make economics, in general, greater in Santa Barbara – that would be tremendous. It’s a beautiful place.”