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It's political glue inside Europe to keep it together - the euro is the best thing going for it since the creation of the common market.

- Robert Mundell
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Author:
Robert Mundell
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I decided to go to the London School of Economics to write my thesis for MIT, under James Meade, Nobelist with Bertil Ohlin in 1977.

Monetary discipline forces fiscal discipline on the politicians as well.

The public is looking for free lunches, and the political competition for votes makes the politicians offer them free lunches.

The problem started before World War I. The gold standard was working fairly well. But it broke down because of the war and what happened in the 1920s. And then the U.S. started to become so dominant in the world, with the dollar becoming the central currency after the 1930s, the whole world economy shifted.

The U.S. berates China for its exchange rate policy, which Washington doesn't like. But one-sided pressure on China to change its exchange rate is misplaced.

The price of gold was fixed at $35 an ounce in 1934, but by the time the U.S. got through the Korean War, the Vietnam war, with all the associated secular inflation, the price level had gone up nearly three times.

I went to the University of Washington in Seattle. This was a very good place to study, and I learned a lot. But it wasn't the right place for my Ph.D.

I have never believed that central banks should have rigid inflation targeting. That is not a good thing to stabilize. There is nothing in economic theory to back this.

The whole idea of having a free trade area when you have gyrating exchange rates doesn't make sense at all. It just spoils the effect of any kind of free trade agreement.

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It's political glue inside Europe to keep it together - the euro is the best thing going for it since the creation of the common market.

It's political glue inside Europe to keep it together - the euro is the best thing going for it since the creation of the common market.

It's political glue inside Europe to keep it together - the euro is the best thing going for it since the creation of the common market.

It's political glue inside Europe to keep it together - the euro is the best thing going for it since the creation of the common market.

It's political glue inside Europe to keep it together - the euro is the best thing going for it since the creation of the common market.

It's political glue inside Europe to keep it together - the euro is the best thing going for it since the creation of the common market.

It's political glue inside Europe to keep it together - the euro is the best thing going for it since the creation of the common market.

It's political glue inside Europe to keep it together - the euro is the best thing going for it since the creation of the common market.

It's political glue inside Europe to keep it together - the euro is the best thing going for it since the creation of the common market.

It's political glue inside Europe to keep it together - the euro is the best thing going for it since the creation of the common market.

It's political glue inside Europe to keep it together - the euro is the best thing going for it since the creation of the common market.

It's political glue inside Europe to keep it together - the euro is the best thing going for it since the creation of the common market.

It's political glue inside Europe to keep it together - the euro is the best thing going for it since the creation of the common market.

It's political glue inside Europe to keep it together - the euro is the best thing going for it since the creation of the common market.

It's political glue inside Europe to keep it together - the euro is the best thing going for it since the creation of the common market.