Michael Kaser was born in London in 1926. His father, Charles Kaser, was a French-speaking Swiss, resulting in Kaser growing up speaking both French and English. He attended Gunnersbury Catholic Grammar School and Wimbledon College in London, then completed the Cambridge Economic Tripos. He then moved to the Economics Section of the UK Ministry of Works, and in 1947 joined the economic research staff at the UK Foreign Office and served as Second Secretary, Commercial Secretariat, at the British Embassy in Moscow. In 1950 he was invited onto the research staff of the United Nations Economic Commission for Europe in Geneva. Kaser participated in missions to five of the Soviet Republics and to all eight Central and East European states between 1951 and 1963. He had learned Serbo-Croat some years earlier, and in the 1940s and 1950s learned Russian and Polish. Later, he learned Albanian, Hungarian and Romanian. Kaser then became Visiting Professor at the Graduate Institute for International Studies of the University of Geneva, and a visiting lecturer at INSEAD (Institut Européen d'Administration des Affaires), an international business school in France.

Kaser was appointed to the University of Oxford jointly with a research fellowship at St. Antony's College in 1963. In 1972, the College elected him a Professorial Fellow. He became deeply involved in University life, serving on and chairing many University Boards and committees. He also served at London, Birmingham and Reading Universities, and held long- and short-term Visiting Lectureships and Professorships in the UK, Europe and the United States. In total, over the course of his academic career he contributed 370 articles to scholarly journals, wrote seven books and has edited many other works. His major works include Soviet Economics (1970), Planning in East Europe (1970), and Comecon (1967). In Oxford, he helped many students from Eastern Europe to develop their academic careers and aided the Polish economist Wlodzimierz Brus in finding a positon at the University after being forced to leave Poland in 1972. Brus also contributed to Kaser's project The Economic History of Eastern Europe 1919-75. Kaser has been recognised for his work by the governments of Albania and Poland; the Berisha government of Albania awarded him the Order of Naim Frashëri in 1995, and the Polish government awarded him the Knight's Cross, Order of Merit in 1999.

Kaser met his wife Elizabeth in Geneva, and they married in 1954. The couple have five children. As he approached his 80th birthday, Kaser withdrew from active involvement in academic and charitable work. He died in 2021.