Robert Mundell, Nobel laureate who inspired the euro, dies at 88

Robert Mundell, the Nobel Prize-winner and supply-side economist who was considered the intellectual father of the euro, has died. He was 88.

His death was confirmed by Sophia Johnson, assistant director of the program for economic research at Columbia University, where Mundell was professor emeritus.

A Columbia University professor of economics, Mundell won the Nobel Prize in economics in 1999 for his theory that flexible markets, including the free movement of labor and capital, are necessary for a single-currency zone to succeed. His research helped lay the foundation for the euro, set up by 11 European governments earlier that year.

“The political glue inside Europe to keep it together – the euro – is the best thing going for it since the creation of the Common Market,” Mundell said in a 2012 interview with Bloomberg. “The end game is going to be deeper integration in Europe and more centralization of the fiscal authority.”

Mundell was also considered an architect of supply-side economics, primarily focused on the lowering of marginal tax rates to incentivize the production and consumption of goods and services. President Ronald Reagan embraced that philosophy in the form of tax cuts and inflation control that helped produce economic growth of 7.3% in 1984, the strongest in three decades.

An advocate of free markets, open trade and limited government, Mundell supported fixed-exchange rates. In 2009, in the aftermath of the world’s worst recession since the 1930s, he renewed his call for the European currency to be fixed against the dollar.