I've already recommended to Bob Bartley that he re-run the Mundell interview I did in 1974 for The Wall Street Journal . You probably have forgotten it yourself, it has been so long ago, but it really was the whole agenda wrapped up in about a thousand words. Here is the interview, one more time. And even when you disagree with him, you must disagree with your hat in the hand. The heart of the current problem, Mr. Mundell believes, lies in the international arena.
Inflation is, and has been for several years, a global phenomenon.
The collapse of discipline of the balance of payments has unleashed a wave of inflation on the world. He believes that the eventual solution must involve not only control of the dollar supply produced in the United States, but regulation of the Eurodollar market, the restabilization of gold and a return to the fixed system. With Professor Arthur B. Laffer of the University of Chicago, he has worked out an economic model to deal with this problem. To deal with the immediate crisis of simultaneous inflation and recession, though, Professor Mundell departs from the traditional belief that monetary and fiscal policies should always be working in the same direction. He believes that inflation and unemployment are separable problems and that to combat them distinct policy instruments are required.