Robert Mundell | |
|---|---|
.jpg) Mundell in 2011 | |
| Born | Robert Alexander Mundell (1932-10-24)October 24, 1932 Perth, Ontario, Canada |
| Died | April 4, 2021(2021-04-04) (aged 88) |
| Academic background | |
| Alma mater | University of British Columbia (BA) University of Washington London School of Economics Massachusetts Institute of Technology (PhD) |
| Doctoral advisor | Charles Kindleberger[3] |
| Academic work | |
| Discipline | Monetary economics |
| School or tradition | Supply-side economics |
| Institutions | Johns Hopkins University (1959–61, 1997–98, 2000–01) University of Chicago (1965–72) Graduate Institute of International Studies in Geneva, Switzerland (1965–75)[1] University of Waterloo (1972–74) McGill University (1989–1990)[2] Columbia University (1974–2021) Chinese University of Hong Kong (2009–2021) |
| Doctoral students | Jacob A. Frenkel Rudi Dornbusch[4] Carmen Reinhart[5] |
| Notable ideas | Mundell–Fleming model Optimum currency areas Research on thegold standard |
| Awards | Nobel Memorial Prize in Economics (1999) |
| Website | |
Robert Alexander MundellCC (October 24, 1932 – April 4, 2021) was a Canadianeconomist. He was a professor of economics atColumbia University and theChinese University of Hong Kong. He received theNobel Memorial Prize in Economic Sciences in 1999 for his pioneering work in monetary dynamics andoptimum currency areas.[1]
Mundell is known as the "father" of theeuro,[6] as he laid the groundwork for its introduction through this work and helped to start the movement known assupply-side economics.[7] Mundell was also known for theMundell–Fleming model andMundell–Tobin effect.
Mundell was born Robert Alexander Mundell on October 24, 1932, inKingston, Ontario, Canada, to Lila Teresa (née Hamilton) and William Mundell.[8][9] His mother was an heiress while his father was a military officer and taught at theRoyal Military College of Canada.[10] He spent his early years in a farm in Ontario and moved to British Columbia with his family when his father retired at the end ofWorld War II. He completed his high school education in British Columbia where he was known to have participated in boxing and chess events during this time.[10]
He earned hisBachelor of Arts in economics and Russian at theVancouver School of Economics of theUniversity of British Columbia, and went on a scholarship to theUniversity of Washington in Seattle.[9] He went on to complete hisPhD from theMassachusetts Institute of Technology while continuing to study at theLondon School of Economics.[9]
In 2006 Mundell earned an honorary Doctor of Laws degree from theUniversity of Waterloo.[11] He was Professor of Economics and Editor of theJournal of Political Economy at theUniversity of Chicago from 1965 to 1972, Chairman of the Department of Economics at theUniversity of Waterloo 1972 to 1974 and since 1974 he had been Professor of Economics atColumbia University.[12] He also held the post of Repap Professor of Economics atMcGill University.[1][13]
From 1974 until his death he had been a professor in the Economics department at Columbia University; and from 2001 he had held Columbia's highest academic rank –University Professor. After completing his post-doctoral fellowship at theUniversity of Chicago in 1957, he began teaching economics atStanford University, and thenPaul H. Nitze School of Advanced International Studies atJohns Hopkins University during 1959–1961.[2] In 1961, he went on to staff theInternational Monetary Fund. Mundell returned to academics as professor of economics at the University of Chicago from 1966 to 1971, and then served as professor during summers at theGraduate Institute of International Studies inGeneva until 1975. In 1989, he was appointed to the post of Repap Professor of Economics atMcGill University.[1][13] In the 1970s, he laid the groundwork for the introduction of theeuro through his pioneering work in monetary dynamics and optimum currency forms for which he won the 1999 Nobel Prize in Economics. During this time he continued to serve as an economic adviser to theUnited Nations, the IMF, theWorld Bank, theEuropean Commission, theFederal Reserve Board, theUnited States Department of Treasury and the governments of Canada and other countries. He was the Distinguished Professor-at-Large ofThe Chinese University of Hong Kong. His 1971 Princeton tractThe dollar and the policy mix is credited with foundingsupply-side economics (Bartlett 1971, p. 101).
Among his major contributions are:
Mundell is best known in politics for his support oftax cuts andsupply-side economics; however, in economics it is for his work on currency areas[16] and internationalexchange rates[17] that he was awarded theSveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel by the Bank of Sweden (Sveriges Riksbank). Nevertheless, supply-side economics featured prominently in his Bank of Sweden prize speech.
In the 1960s, Mundell's native Canada floated its exchange rate: this caused Mundell to begin investigating the results offloating exchange rates, a phenomenon not widely seen since the 1930s "Stockholm School" successfully lobbiedSweden to leave thegold standard.
In 1962, along withMarcus Fleming, he co-authored theMundell–Fleming model of exchange rates, and noted that it was impossible to have domestic autonomy, fixed exchange rates,and free capital flows: no more than two of those objectives could be met. The model is, in effect, an extension of theIS/LM model applied to currency rates.
According to Mundell's analysis:
His analysis led to his conclusion that it was a disagreement betweenEurope and theUnited States over the rate of inflation, partially to finance theVietnam War, and that Bretton Woods disintegrated because of the undervaluing of gold and the consequent monetary discipline breakdown. There is a famous point/counterpoint over this issue between Mundell andMilton Friedman.[18]
This work later led to the creation of theeuro and his prediction that leaving the Bretton Woods system would lead to "stagflation" so long as highly progressive income tax rates applied. In 1974, he advocated a drastic tax reduction and a flattening of income tax rates.
Mundell, though lionized by some conservatives, has many of his harshest critics from the right: he denied the need for a fixed gold-based currency or currency board[citation needed] (he still often recommended this as a policy inhyperinflationary environments) and he was both a fiscal andbalance of payments deficit hawk. He is well known for stating that in a floating exchange rate system, expansion of the money supply can come about only by a positive balance of payments.
In 2000, Mundell recommended thatCanada permanently tieits dollar's value to theU.S. dollar.[19]
Robert Mundell was considered the "father of theeuro" for his early work encouraging a European monetary union.[6][20] Starting in the 1960s, Mundell supported the constitution of aEuropean Economic and Monetary Union and pushed for the creation of the euro.[21]
In 2000, he predicted that before 2010, theeurozone would expand to cover 50 countries, while the U.S. dollar would spread throughout Latin America, and much of Asia would look towards the yen.[22] Such predictions have proved highly inaccurate.
In his 2012 article "Robert Mundell, evil genius of the euro",Greg Palast affirms that Mundell advocated for the euro because its implementation would have the effect of removing democratic control overmonetary policy. As such, when a crisis hits, eurozone governments would not be able to stimulate the economy by creating money, as is prescribed byKeynesian economics. They would thus be forced to resort to other means to curtail unemployment, such as deregulating businesses, privatizing state industries, cutting taxes, and weakening thesocial safety net.[23]
In 2014, Mundell voiced his opposition to proposals of afiscal union between the European states. He declared that "it would be insane to have a central European authority that controls all the taxes and duties of the states ... controlled in the Union. This transfer of sovereignty is far too big". He also voiced his opposition to the prospect that countries could be liable for other countries' debt.[24]
Mundell was awarded theGuggenheim Fellowship in 1971 and theNobel Memorial Prize in Economics in 1999.[25][26] In 2002 he was made a Companion of theOrder of Canada.[27]
In 1992, Mundell received aDocteur Honoris Causa from theUniversity of Paris. Mundell's honorary professorships and fellowships were fromBrookings Institution, the University of Chicago, theUniversity of Southern California,McGill University, theUniversity of Pennsylvania, theBologna Center andRenmin University of China. He became a Fellow of theAmerican Academy of Arts and Sciences in 1998. In June 2005 he was awarded the Global Economics Prize World Economics Institute inKiel,Germany, and in September 2005 he was made aCavaliere di Gran Croce del Reale Ordine del Merito sotto il Titolo di San Ludovico by Principe Don Carlo Ugo di Borbone Parma.
TheMundell International University of Entrepreneurship in theZhongguancun district ofBeijing,People's Republic of China, is named in his honour.[28]
Mundell won the Nobel Memorial Prize in Economic Science in 1999 and gave as his prize lecture a speech titled "A Reconsideration of the Twentieth Century". According to the Nobel Prize Committee, he got the honour for "his analysis of monetary and fiscal policy under different exchange rate regimes and his analysis of optimum currency areas".
Mundell concluded in that lecture that "the international monetary system depends only on the power configuration of the countries that make it up". He divided the entire twentieth century into three parts by different periods of time:
With the destruction of the old monetary system, a new international monetary system was finally founded. Controlling inflation by each country became a main topic during this era.
Mundell appeared onCBS'sLate Show with David Letterman. His first appearance was on October 17, 2002,[29] where he gaveThe Top 10 List on "Ways My Life has Changed Since Winning the Nobel Prize." In March 2004[30] he told "You might be a redneck" jokes, followed in May 2004[31] with "Yo Mama" jokes. In September 2004[32] he appeared again, this time to read excerpts fromParis Hilton's memoir at random moments throughout the show. In November 2005[33] he told a series ofRodney Dangerfield's jokes. On February 7, 2006,[34] he readGrammy Award nominated song lyrics, the night before CBS aired the48th Grammy Awards.
Mundell also appeared onBloomberg Television many times, mainly speaking on euro-related topics and other European financial issues.[35]
Mundell has also appeared onChina Central Television's popularLecture Room series. He was also a special guest making the ceremonial first move in Game Five of the 2010 World Chess Championship betweenViswanathan Anand andVeselin Topalov.[36] He also played the opening move at thePearl Spring Chess Tournament.[37]
Mundell was married to Valerie Natsios-Mundell for well over 20 years, and they had a son who was born in 1997.
They lived inMonteriggioni,Siena,Tuscany, Italy together for over 35 years until Mundell died on April 4, 2021, fromcholangiocarcinoma, a cancer of the bile duct.[38][39][40] He was aged 88.[9]
, accessed 11 October 2020
| Awards | ||
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| Preceded by | Laureate of the Nobel Memorial Prize in Economics 1999 | Succeeded by |
