RIP Robert Mundell
Undergrad macroeconomics students of my generation learned 3 core models: The Quantity theory identity MV= PT (which becomes a model when you assert M[oney]is controlled by the Cent Bank, V[elocity] is a function of primitives, P[rice level] is subject to some time varying expectations augmented adjustment process, and T[ransactions] reflects nominal GDP), IS-LM and the Mundell- Fleming extension to the open economy, and Lucas’s rational expectations island parable.
There were 2 major intellectual battles in post war macroeconomics (each featuring Milton Friedman as a protagonist). Keynesians vs Monetarists and Mundell vs Friedman (over the benefits of commodity anchor and fixed exchange rates vs quantitative anchor and flexible exchange rates).
He was giant of the field. His ideas have been as consequential to economic policy making as those of Keynes and Friedman. Imagine what it must have been like at Chicago in the 1960’s where Mundell and Friedman debated at the weekly money workshop. What a dream!
