The common currency for the European Union - the Euro - is often regarded as one of the most significant economic experiments of the present century. It played a vital role in the European Union's economic and political integration.
Its advantages are many and can be felt on a number of levels, from individuals, to businesses to entire economies.
The European Commission aptly describes its advantages as: "more choice and stable prices for consumers and citizens, greater security and more opportunities for businesses and markets, improved economic stability and growth, more integrated financial markets, a stronger presence for the EU in the global economy, a tangible sign of a European identity".
Today, the Euro has become the second-largest reserve currency in the world as well as the second-most traded currency, next to USD. The Euro also has one of the world's highest combined values of banknotes and coins in circulation as of December 2019, with more than €1.3 trillion in circulation.
So who's idea was the Euro? Or more appropriately, who laid the theoretical foundation for a currency that can travel across national boundaries?
The 27 countries that are a part of the European Union have economies that are vastly different in size, are in different stages of development and operated, at least before the introduction of the common currency, on contradictory regulations. It was no mean task to introduce a common currency in its midst.
Robert A. Mundell, who passed away on April 5 at the age of 88 from cholangiocarcinoma, was one of the brightest stars in modern economics who pioneered the development of a uniform currency system across Europe and the theoretical discussions on optimum currency areas.
He aided in the formation of the supply-side economics movement, researched the operation of the gold standard, predicted the 1970s inflation, developed the Mundell–Fleming model, and the Mundell–Tobin effect.
The Nobel Prize-winning economist has been best-described by Miranda Xafa, a senior scholar at the Centre for International Governance Innovation (CIGI), as "an unorthodox, independent-minded thinker capable of thinking outside the box. History will likely recognise that Robert Mundell was the greatest economist of the 20th century in the post-Keynesian era".
Jacob Frenkel, a former governor of the Bank of Israel, wrote a book on professor Mundell where he said: "you have created modern open-economy macroeconomics. My generation of economists owe you all that we know".
His enormous prestige in the professional field is centered on the creation of the common currency, which earned him the reputation of being a "father of the Euro".
In 1969, he developed a strategy for European currency union and then advised European authorities on how to make it work in practice from time to time.
Eventually in 1999, he was awarded the Nobel Prize in Economics for his theory which advanced the idea that a single-currency zone must have flexible markets, together with free movement of labor and capital. His research was instrumental in laying the groundwork for the Euro.
To this end, professor Mundell said the following: "this is in my view a great step forward, because it will bring forth new and for once meaningful ideas about reform of the international financial architecture. The euro promises to be a catalyst for international monetary reform".
Professor Mundell also famously said in an interview with the Bloomberg Radio in 2012: "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. The end game is going to be deeper integration in Europe and more centralisation of fiscal authority".
Robert Alexander Mundell was born in the Kingston city of Ontario province, on 24 October 1932. After his father's retirement from teaching at the Royal Military College at the end of Second world war, they relocated to British Columbia, where he discovered a "cult of rugged individuality" that aided in the development of his laissez-faire economic perspective.
He completed his high school education there. He earned a scholarship to the University of Washington after studying economics and Slavonic studies at the University of British Columbia.
He continued to study at the London School of Economics whilst also completing his PhD at the Massachusetts Institute of Technology. He was also awarded an honorary Doctor of Laws degree by the University of Waterloo in 2006.
Because he taught at Columbia University, Stanford University, Johns Hopkins University, Graduate Institute of International Studies, McGill University, and The Chinese University of Hong Kong, his reputation spread far and wide in the field of academia and beyond.
Other than the aforementioned ideas he helped advance, a series of highly acclaimed papers, particularly those published from the late 1950s to the late 1960s, also made significant contributions in cementing his legacy as one of the best economists of the 21st century.
Throughout his career, he was very active in defending his own philosophies and standing up for what was right. As a result, he frequently clashed with the profession's titans, such as University of Chicago's Milton Friedman and Harvard's Martin Feldstein.
He also criticised Barack Obama's decision to increase income taxes for the wealthiest Americans in November 2008, instead suggesting a cut in corporate taxes to 15% from 35%.
He truly enjoyed being a maverick. Many of his statements make this clear. For example he told the Globe and Mail in 1986: "I find it quite enjoyable that people say I'm original but wrong. I'd prefer they say that to saying that I'm conventional but right".
Again, he stated in a 2006 interview that winning the Nobel Prize "was particularly pleasing to me as my work has been quite controversial and no doubt stepped on a lot of intellectual toes… Even more than that, when I say something, people listen. Maybe they shouldn't, but they do".
He was partially paralysed and unable to write after suffering a stroke in 2013, but he continued reading, playing chess, and even painting colorful abstract paintings. His passing has left a void that no one can fill.
He was a genius maverick and a visionary change-maker whose work was far ahead of his time. Even after his death, his legacy will live on until the end of time, because his revolutionary ideas have changed the lives of millions of people.
The Swedish Academy of Sciences commented about him: "his contribution to monetary theory and optimum currency areas remains outstanding and has inspired generations of researchers. Mundell chose the problems he analysed with almost prophetic accuracy, predicting the future course of the international monetary system and international capital markets".
He is survived by his second wife, Valerie Natsios-Mundell, as well as a son and a daughter from his first marriage (another son from his first marriage was killed in a car accident in 2018) and a son from his second marriage.