Ec 970

Exchange Rates
and
Optimum Currency Areas

Robert Mundell
1999

"for his analysis of monetary and

fiscal policy under different
exchange rate regimes and his
analysis of optimum currency
areas"

Mundell-Fleming model
fiscal vs. monetary policy
exchange rate regimes

fixed vs. floating

Optimum Currency Areas

loss of monetary policy
independence
asymmetric shocks
labor mobility
fiscal transfers

prescient
Bretton Woods until the 1970s
Canada floats

Father of the Euro