NOBEL-WINNING ECONOMIST, ARCHITECT OF REAGANOMICS

1932-2021

Robert Mundell, a Nobel Prize-winning economist who helped shape economic policy on both sides of the Atlantic as an intellectual architect of the euro and President Ronald Reagan’s supply-side tax cuts, died April 4 at the 16th-century palazzo where he lived in the countryside near Siena, Italy. He was 88.

The cause was cholangiocarcinoma, a cancer of the bile duct, said his wife, Valerie Natsios-Mundell.

Mundell was widely regarded as one of the most consequential economists of the late 20th century, his work often compared or even equated with that of John Maynard Keynes and Milton Friedman. Born in Canada in 1932, he spent much of his career in the United States, teaching at Columbia University and cultivating influential admirers among the Wall Street Journal editorial board, the Reagan administration and beyond.

He “shaped the way we think about economics,” Vivek Dehejia, a professor at

Carleton University in Ottawa and a former student of Mundell, said in an interview, as well as “the way governments do macroeconomic policy.”

Mundell received the Nobel Memorial Prize in Economic Sciences in 1999, months after the countries of Europe began the complex process of abandoning the German mark, the French franc, the Italian lira, the Dutch guilder and other individual currencies in favor of the euro, which was to be used across the continent.

Mundell’s name was forever linked to an economic concept known as the Mundell-Fleming model, which he developed with another economist, Marcus Fleming, in the 1960s. Unlike earlier prevailing models, it allowed for the complexity of open economies, in which capital moves among nations and exchange rates are flexible rather than fixed.

Mundell was skeptical of systems with flexible exchange rates, regarding them as too vulnerable to volatility.

In the United States, Mundell was best known for his role, alongside economists including Arthur Laffer, in promoting the combination of tax cuts to spur spending and interest-rate hikes to curb inflation that defined the economic policy known as Reaganomics.

“His work really began to give intellectual firepower to the supply-side tax cuts movement,” former U.S. Rep. Jack Kemp, R-N.Y., a leading supply-sider in Congress, told The New York Times after Mundell’s Nobel Prize was announced. “By 1980, then-candidate Ronald Reagan had become persuaded about what Robert Mundell was saying — and the rest is history.”

Four decades later, the principles of supply-side economics remain deeply controversial, attracting fervid disciples as well as critics.

Robert Alexander Mundell, the third of four sons, was born in Kingston, Ontario, on Oct. 24, 1932. His father was an officer in the Canadian army. His mother inherited a castle that she then had to surrender because of its tax burden, a memory he carried with him into his career.