Robert Mundell

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Robert Alexander Mundell , CC (* 24. October 1932 in Kingston , Ontario , † 4. April 2021 in Siena , Italy ) was a Canadian economist , the 1999 Nobel Memorial Prize in Economic Sciences for his work on the theory of optimal currency areas was awarded . He was a professor of economics at Columbia University and the Chinese University of Hong Kong .

Robert Mundell (1998)

Life

Few details are known about his life. Contrary to custom, Mundell did not publish an autobiography even on the occasion of the Nobel Prize ceremony .

After studying at the University of British Columbia in Vancouver, the University of Washington in Seattle, the Massachusetts Institute of Technology and the London School of Economics and Political Science , Mundell received his PhD from MIT in 1956 with Charles P. Kindleberger . This was followed by a research stay at the University of Chicago as a post-doctoral fellow in political economics.

After teaching at Stanford University and at the Johns Hopkins Bologna Center of Advanced International Studies, he joined the International Monetary Fund in 1961 . In 1966 he resumed teaching, including in Chicago and Geneva , and after various other positions from 1974 at Columbia University. In addition, he worked as a consultant for international organizations such as the World Bank , International Monetary Fund and the European Commission as well as for many governments worldwide. His economic theories were often caught in the crossfire of conflicting political interests. In 1998 Mundell was elected to the American Academy of Arts and Sciences .

Mundell withdrew to the wild several times for some time. Most recently he lived in a castle in Tuscany (Italy). Here he occasionally hosted informal international conferences attended by high-ranking economists and politicians. He was an honorary doctor of the Finance University of the Government of the Russian Federation . In 2006 he received an honorary doctorate from the University of Iceland . Mundell also became known to the general public for his coarse and humorous appearances on the Late Show with David Letterman .

Mundell died in early April 2021 at the age of 88.

research

List of outstanding research results

Working on international money flows and exchange rates

Mundell is best known in politics for his advocacy of tax cuts and related supply-side policies. Among economists, however, his name is mainly associated with exchange rate regimes and the theory of optimal currency areas, for which he also received the Nobel Prize in economics. In his Nobel Prize speech, however, he mainly dealt with the issue of supply policy.

After Canada switched to free-floating currency parity in the 1960s, Mundell investigated the economic consequences of free exchange rates, which there were few options for during the time of the Bretton Woods gold-forex standard. A similar opportunity to study this phenomenon came in the early 1930s when Sweden switched to a flexible exchange rate system for a number of years.

In the early 1960s, he and Marcus Fleming independently developed the basic model of the macroeconomics of open economies, which became known as the Mundell-Fleming model . The model describes a small economy that is connected to other countries through trade and cross-border capital flows, and shows which policy options exist in this case and how the country reacts to changes in the internal and external framework conditions. In particular, it shows the impossibility of achieving national monetary policy autonomy, fixed exchange rates and free capital flows at the same time (Mundell-Fleming Trilemma). Only two of the three goals can be achieved. From the theory it also follows:

  • The stability of the Bretton Woods system was based less on the gold standard and more on the US national reserves.
  • Demand-driven economic policy in a floating exchange rate system is ineffective because it hinders central banks.
  • The economic equilibrium between individual currency zones is based on a similar degree of price stability. A common monetary policy for all would therefore be sufficient to maintain the equilibrium.

He concluded that the Bretton Woods system had dissolved because Europe and the US had different attitudes towards fighting inflation, and partly because of the financing of the Vietnam War . This led to an undervaluation of gold and a decline in monetary policy discipline. A famous debate broke out with Milton Friedman over his analysis .

His findings contributed to the decision to introduce the euro . Furthermore, his theory said true predicted that after leaving the Bretton Woods system, a stagflation , ie inflation with simultaneous stagnation of the gross domestic product would occur. As a countermeasure, he advocated drastic income tax cuts in 1974, combined with a reduction in tax progression.

Mundell is revered as a figurehead by conservative political circles in the United States, but has critics not only in the Democratic Party camp , but also in parts of the conservative camp. The criticism is sparked on the one hand by his rejection of the gold standard, except in situations of hyperinflation, and on the other hand by his sharp rejection of the US debt policy. In a system of free exchange rates, Mundell emphasizes, an expansion of the money supply can only be achieved through a positive balance of payments.

In January 2013 the German press reported that Mundell, the “father of the euro”, was “rebelling” against fiscal union and transfer billions in connection with the sovereign debt crisis : “Only a return to national discipline could save the joint project euro. But not the endless money doping for the debt-addicted southerners ”.

Selected publications

  • A Theory of Optimum Currency Areas. In: The American Economic Review . 1961, ISSN  0002-8282 , pp. 657-665.
  • The International Monetary System (Conflict and Reform). 1965
  • Man and Economics and International Economics. 1968
  • Monetary Theory: Interest, Inflation and Growth in the World Economy. 1983
  • Global disequilibrium. 1990
  • Debts, Deficits and Economic Performance. 1991
  • Building the New Europe. 1992
  • Inflation and Growth in China. 1996

Web links

Commons : Robert Mundell  - Collection of images, videos and audio files

Individual evidence

  1. ↑ a b Economist Robert Mundell passes away at 88. In: ecns.cn. April 5, 2021, accessed April 5, 2021 .
  2. ↑ List of honorary doctorates from the University of Iceland ( Memento from February 14, 2015 in the Internet Archive ) (English)
  3. ↑ Minutes of the debate ( memento of January 18, 2012 in the Internet Archive ) (PDF; 296 kB) at irpp.org.
  4. ↑ Uli Dönch: Father of the Euro implores: Eurozone has to go back to “go”. In: Focus Online . July 29, 2014, accessed April 5, 2021 .
personal data
SURNAME Mundell, Robert
ALTERNATIVE NAMES Mundell, Robert Alexander (full name); Mundell, Robert A .; Mundell, RA
BRIEF DESCRIPTION Canadian economist, 1999 Nobel Prize in Economics
DATE OF BIRTH October 24, 1932
PLACE OF BIRTH Kingston, Ontario , Canada
DATE OF DEATH April 4, 2021
PLACE OF DEATH Siena , Italy