Who Is Robert A. Mundell?
October 14, 1999
Champions of free enterprise are hailing the decision of the Nobel Committee to award this year's prize in economics to Robert A. Mundell, a Columbia University professor and father of Reagan-era supply-side economics. He was also a force in launching the new European common currency, the euro.
- Mundell conducted research into common currencies when the idea of the euro was still a fantasy.
- He also examined the implications of cross-border capital flows and flexible foreign-exchange rates when capital flows were still restricted and currencies still fixed to each other.
- He stoutly defended the gold standard in his works, and was an early advocate of tax-cutting, supply-side theory which laid the foundation for "Reaganomics."
Economist Jude Wanniski says Mundell "made it possible for Ronald Reagan to be elected president," by providing the intellectual backing for the Reagan tax cuts.
In a profession long dominated by the theories advanced by John Maynard Keynes, Mundell's ideas were considered radical when they were first advanced in the 1960s and 1970s. But they have become nearly mainstream among economists as supply-side economics has been vindicated by the skyrocketing growth of the 1980s and 1990s.
When the Reagan tax cuts became fully effective in 1983, the U.S. economy began its long march forward and, experts point out, has never looked back except for a nine-month recession associated with the savings and loan crisis.
In its lead editorial this morning, the Wall Street Journal comments: "In terms of actual policy initiatives, Robert Mundell has been the most influential economist since John Maynard Keynes."
Sources: Michael M. Phillips, "Mundell Wins Nobel Prize in Economics," and Editorial, "A Supply-Side Nobel," both in the Wall Street Journal, October 14, 1999.
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