NOBEL PRIZE FOR ECONOMICS

October 13, 1999
		The economist who laid the groundwork decades ago for the creation of the European common currency, Robert Mundell, has won the 1999 Nobel Prize for economics sciences. -- Posted Wednesday, 5:45pm EDT

A Special Report on the 1999 Nobel Prizes Oct. 12, 1999: Ahmed Zewail wins the Nobel Prize for Chemistry. Oct. 12, 1999: The Nobel Prize for Physics. Oct. 11, 1999: Dr. Günter Blobel wins the Nobel Prize for Medicine. Oct. 1, 1999: German author Günter Grass wins the Nobel Prize for Literature.   The Nobel Foundation Robert Mundell at the Columbia University

Mundell, a Canadian-born professor at Columbia University in New York, developed monetary theories that critics called radical in the 1960s, but which later became the basis for the European currency, the Euro. The idea stemmed from his research into whether the Canadian dollar should have a fixed or flexible exchange rate against the U.S. dollar. Mundell later decided more than one country could share a common currency. "Early on, I came to have the opinion that Europe was going to move toward closer integration, and monetary union would be a good thing for Europe," Mundell, 67, said. He went on to prepare one of the first plans for a European common currency and has been an adviser to the United Nations, the International Monetary Fund, the World Bank, the US and Canadian governments as well as governments in Latin America and Europe. "His work on monetary dynamics and optimum currency areas has inspired generations of researchers," the Royal Swedish Academy of Sciences said in announcing the award. "Although dating back several decades, Mundell's contributions remain outstanding and constitute the core of teaching in international macroeconomics." Mundell's colleagues around the world praise the impact of his work. "He's a giant in the field of international monetary economics," said Charles Goodhart, an economist at the London School of Economics. "He absolutely dominated the field and changed it dramatically in the '60s and '70s." Mundell's first book, Man and Economics, was published in the United States in 1968. Since then, he has written or cowritten and edited dozens of books, articles and papers. Mundell also helped develop in 1963 what would be called the Mundell-Fleming Model on exchange rate equilibrium -- a model still widely taught in textbooks and developed with Marcus Fleming of the International Monetary Fund. "It's extremely important to me," Mundell said. "It's a measure of the respect that colleagues around the world have for me." With the recognition comes a prize of $960,000. Mundell said he will use at least a part of the money to repair a castle he owns in Italy. The Nobel prize in economic sciences was first awarded in 1968.