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Nobel prize-winner speaks of new monetary and credit system

24 may 2013, 19:22
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1999 Nobel prize-winner in economics Robert Mundell. ©REUTERS/Heino Kalis
1999 Nobel prize-winner in economics Robert Mundell. ©REUTERS/Heino Kalis
Speaking in Kazakhstan Nobel prize-winner Robert Mundell has once again suggested that a new global monetary and credit system should be established, Tengrinews.kz reports.

“I would suggest that President Nursultan Nazarbayev raises the issue of improving the global monetary and credit system at the coming G20 meeting in Saint-Petersburg. We have to establish a commission, as we are still acting under the Bretton Woods system, but the system itself has disappeared a long time ago. It is necessary to come up with a new system that would work under the G20 and would perfectly suit and include big and small economies,” Mundell said at the Global Anti-Crisis Conference in Astana.

According to him, another way to solve the financial crisis is to introduce a global international currency. The Nobel prize-winner came to this initiative after a small insight into to history.

“We still have no explanation of why crises occur. We can see that the current crisis is deeply rooted in the crisis of 1971. The exchange rate was changing during this period. The Asian crisis started in the 1980-90s. So, US dollar started growing and Japanese yen started strengthening. The mortgage crisis happened in 2007, US dollar started growing and in October 2008 it dropped against Euro. Instability of exchange rate is part of every crisis. This is inevitable. However, if we viewed the planet as one country, we wouldn't have multiple currencies. Former chairman of the federal reserve has argued that the global economy needs a global currency. And this is one of the ways for solving this problem, one of the ways,” Mundell said.

Earlier Kazakhstan President raised the issue of introducing a common currency. He suggested to create regional payment units and then get to creation of a new global currency that would be working for the benefit of all the countries.


By Baubek Konyrov

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