World's economy already passed worst stage: Mundell

By Lee Chi-dong
SEOUL, Oct. 30 (Yonhap) -- Nobel economics laureate Robert Mundell said Thursday
the worst of the world economic crisis was over, saying the U.S. is now in the
recovery phase.
"The world economy is not in as bad shape as it appears from the news," he said
in his keynote presentation at World Leaders Forum held here to commemorate the
60th anniversary of the founding of South Korea. "The real economy has not
collapsed. The worst is behind us."
He cited U.S. and European economic growth trends as a reason for his optimistic
view.
"The U.S. growth was superb in the first three quarters of 2007. Then there were
two quarters of nearly zero growth -- a severe growth recession," the professor
of economics at Columbia University in New York said. "Then the second quarter of
2008, the U.S. growth shot up to 3.3 percent. In the third quarter, growth will
probably turn out to be about 2 percent."
Mundell pointed out that the pattern of the slowdowns in the U.S. and European
economies was similar to that in 2002.
"At that time, the U.S. went first, then Europe followed it about eight months
later," he said. "The same pattern is with us now. The U.S. is now in the
recovery phase while Europe is retreating, giving rise to the huge swing of
exchange rates."
The professor, nicknamed the "father of the euro," said there is a need to
consider the possibilities of an Asian currency or an Asian Monetary Fund.
Mundell, who won the Nobel Prize in economics in 1999, developed a pioneering
theory of optimum currency even before the idea of the single European currency
was hatched in the 1970s.
"My view is that it is best for Asia to pursue both a regional approach or an
international approach in response to the Europe-led increased regionalization of
the international monetary system," he said.