Prof Mundell and the Unpredictable Euro Crisis

–– Rejoinder, 17 Years Later ––
The article by Robert Mundell, written on the eve of the establishment of the euro in May 1998, inevitably reflects his very optimistic and enthusiastic assessment of an event that seemed to confirm his own views about the evolution of the international monetary system. Mundell had in fact pioneered, already in the 1960s, analysis of the impact of monetary and fiscal policies in different exchange rate regimes, as well as analysis of “optimum currency areas”. When he was awarded the Nobel Prize in Economic Sciences in December 1999 for these very contributions to international economics, the media reported that the prize had been given to “the father of the euro”. […]