The World Monetary Constitution: Mundell and Paper Gold

This article provides an in-depth analysis of Robert Mundell's proposal for reforming the international monetary order. The author explores the concept of a global monetary constitution, which envisages treating the global economy as a single, integrated entity. A key element of this vision is the introduction of so-called paper gold as a modern reserve asset, intended to replace traditional precious metals and stabilize international liquidity. The text discusses in detail the mechanisms of inflation, the Pigouvian wealth effect, and the dynamics of money velocity in the context of public debt. Mundell challenges technocratic approaches, proposing the coordination of fiscal and monetary policy to avoid financial illusion. The analysis also covers the role of special drawing rights and the myths surrounding dollar devaluation, offering a comprehensive perspective on the architecture of a future, optimal world bank and the stabilization of global finance.