A St.-Louis equation to reassess the influence of macroeconomic-policy instruments

Belliveau, Stefan (2011): A St.-Louis equation to reassess the influence of macroeconomic-policy instruments.

Abstract

An analysis of the impact from stabilizing instruments important to macroeconomic policy on output in the US is presented. A simple approach to identify the influence of macroeconomic-policy instruments, based on the St. Louis equation, is clearly presented and examined using annual US data from 1956-2007. The conclusion from this analysis is that both monetary and fiscal policy are viable options for policymakers seeking to stabilize output.

• Item Type: MPRA Paper
• Language: English
• Keywords: Business cycles; monetary policy; fiscal policy
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E63 - Comparative or Joint Analysis of Fiscal and Monetary Policy ; Stabilization ; Treasury Policy

References

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De Leeuw, Frank and John Kalchbrenner. 1969. “ Monetary and fiscal actions: A test of their relative importance in economic stabilization – Comment”. Federal Reserve Bank of St. Louis Review, 51: 6-11.

Jordan, Jerry L. 1986. “The Andersen-Jordan Approach after Nearly 20 Years”. Federal Reserve Bank of St. Louis Review, 68: 5-8.

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