Robert Alexander Mundell - A Biography

As a successful Canadian economist, Robert Alexander Mundell, is a Nobel Prize-winning professor at the Chinese University of Hong Kong and Columbia University.

Notable Accomplishments

Mundell received the prestigious Nobel Memorial Prize for his work in economics in 1999 for his work that he did for optimum currency and monetary dynamics. Mundell is known for laying that path for introducing the euro and was one of many who started the movement of supply-side economics. During the course of his life, he is responsible for introducing the economic terms the Mundell–Fleming model and Mundell–Tobin effect.

Life Story

Mundell was born and raised in the west end of Kingston, Ontario, Canada, and at the age of 22, he earned his Bachelors Degree in Economics from the University of British Columbia, and received his Master’s Degree from the University of Washington in Seattle. When Mundell finished his studies at the London School of Economics and the University of British Columbia, he decided to attend the prestigious Massachusetts Institute of Technology, where he received a PhD in Economics. In 2006, the University of Waterloo awarded Mundell an honorary Doctor of Laws degree. Mundell was at the University of Chicago as the Editor of the Journal of Political Economy and the Professor of Economics from 1965 to 1972, as well as the Chairman of the Department of Economics at the University of Waterloo from 1972 to 1974 and since 1974 he has been with Columbia University as the Professor of Economics. Mundell also held the position of Professor of Economics at McGill University.

Career

Since 1974, Mundell has been teaching at the Columbia University where he works as a professor in the Economics department. After Mundell completed his post-doctoral research at the University of Chicago, he started teaching economics at Stanford University, and then he moved to Johns Hopkins University during 1959–1961. Mundell decided to return to the University of Chicago as a professor of economics from 1966 to 1971, and during the summer months, he taught In Switzerland as a professor of economics at the Graduate Institute of International studies until 1975. In 1989, Mundell taught at the University of McGill as the Professor of Economics.

During the early 1970’s, Mundell started paving the way for the introduction of the European dollar through his work in optimum currency forms and monetary dynamics and which led him to winning the Nobel Prize in 1999. Mundell also served multiple parties such as the United Nations, The United States Department of Treasury, The World Bank, the European Commission, and the government of Canada as an economic advisor. Currently, Mundell is teaching at the Chinese University of Hong Kong where he hold the title of ‘Distinguished Professor at Large”.

Throughout his distinguished career, Mundell has made major contributions to the world of economics by his work with his contributions in the development of the European dollar, his work on optimum currency areas, his help in starting the movement of supply-side economics, his research on how the operation of the gold standard worked in different eras, Predicting the inflation of the early 1970s, and finally, the Mundell–Fleming model and the Mundell–Tobin effect

Recognition

Throughout the course of his career, Mundell has won numerous prestigious awards such as the Guggenheim Fellowship and the Nobel Memorial Prize in Economics. Mundell was also made a Companion of the Order of Canada.

In mid-1992, the University of Paris awarded Mundell the Docteur Honoris Causa. Also, Mundell’s honorary professorships and fellowships were awarded to him from the University of Chicago, Brookings Institution, McGill University, the University of Southern California, the University of Pennsylvania and Renmin University of China. In 1998, Mundell also became a fellow of the American Academy of Arts and Sciences. In 2005, Mundell was awarded with the Global Economics Prize in Kiel Germany, from the World Economics Institute.

In Beijing China, The Mundell International University of Entrepreneurship is named in Mundell’s his honor.

Politics

Mundell is seen in the political world for supporting of tax cuts and supply-side economics. The reason why his recognized in politics for his work with economics is because of his work on currency and international exchange rates for which he was given the Sveriges Riksbank Prize by the Bank of Sweden for his work in Economic Sciences.

During the 1960’s, Canada floated its exchange rate, which Mudell began to investigate, as this issue was puzzling to him. It was at this time that Mundell began to co-author a book with Marcus Flemming titled “The Mundell-Flemming Model of Exchange Rates. In his book, it is stated that to have fixed exchange rates, domestic autonomy, and free capital flows was not possible because to meet more than two of those objectives was impossible.

Mundell hypothesized that discipline using the Bretton Woods system was more likely due to the Federal Reserve of the United States than to the discipline of gold, and that demand side fiscal policy would not be very effective under a floating exchange rate system in controlling central banks.

Mundell also hypothesized that single currency zones relied on comparable levels of price stability, where one single monetary policy would be beneficial for all. The analysis that Mundell believed was that it was a disagreement between The United States and Europe over the rate of inflation, due to the finance of the Vietnam War, and that Bretton Woods fell apart due to undervaluing gold and the monetary discipline breakdown. This has led to a great debate over this issue with both Mundell and Milton Friedman

Mundells work later attributed to the creation of the European dollar and his prognosis that stagflation may occur if the Bretton Woods system was withdrawn from. In 1974, Mundell was advocating a dramatic tax reduction and a lowering of income tax rates.

Mundell, who was given a lot of public attention by some conservatives, because he was one of few people who believed the need for a fixed currency based on gold or a currency board, and to this day, Mundell still recommends this action as a policy in hyperinflationary environments. Mundell is still well known for revealing that only by a positive balance of payments can the expansion of the money supply come about in a floating exchange rate system,

In the year 2000, Mundell had predicted that before 2010, the European dollar would be used in over 50 countries, and the dollar would start being used throughout the Latin America region, and most of Asia would be using the yen. As is known today, most of those predictions have been inaccurate

Nobel Prize

In 1999, Mundell won the prestigious Nobel Memorial Prize in Economic Science for his lecture on the Reconsideration of the Twentieth Century. Mundell received this honour because of his analysis of different exchange rate regimes under optimum currency areas.

During his Nobel Prize lecture, Mundell stated that the international monetary system depends only on the power configuration of the countries that make it up and he divided his lecture into 3 parts by different periods of time.

In the first third of the century, Mundell stated that of the Great Depression of the 1930s, economics was dominated by the confrontation gold standard using the Federal Reserve System.

The second third of the century was from World War II to 1973, when the international monetary system was dominated by fixing the price of gold with the US dollar.

The last third of the century started with the destruction of the old monetary system due to the problem of inflation.

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.

Author

Mundell is the author of a number of works and articles on the economic theory of international economics, and he helped develop one of the first plans for a universal currency in Europe and is known as the father of the theory of optimum currency areas. Mundell was a one of the first to believe in the theory of the monetary and fiscal policy mix, the theory of inflation, interest and growth, the monetary approach to the balance of payments, and one of the co-founders of supply-side economics. Mundell has also written elaborate articles on the international monetary system and its history.

Mundell’s writings include well over a hundred articles in scientific journals and the following books: 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 1971; and co-edited A Monetary Agenda for the World Economy (1983); Global Disequilibrium (1990); Debts, Deficits and Economic Performance (1991); Building the New Europe (1992); Inflation and Growth in China (1996).