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- Title
THE ST. LOUIS EQUATION: "DEMOCRATIC" AND "REPUBLICAN" VERSIONS AND OTHER EXPERIMENTS.
- Authors
Silber, William L.
- Abstract
The equation developed by the Research Department of the Federal Reserve Bank of Saint Louis to explain changes in gross national product (GNP) has had a considerable impact on the thinking of monetary economists. It has, in particular, reinforced the position of those who contend that monetary policy has a powerful impact on GNP. On the other hand, serious doubts arise according to the basic Saint Louis equation as to the efficacy of the fiscal impact on GNP. The article presents results of various experiments with the basic Saint Louis equation using the Saint Louis variables. These formulations have revealed a more powerful role for fiscal policy while the strength of monetary policy remained unaltered. Most of these reformulations of the Saint Louis equation have specified different monetary and/or fiscal variables than those used by Saint Louis. This has given rise to disputes between researchers as to the appropriate monetary and fiscal variables to use in these equations.
- Subjects
SAINT Louis (Mo.); MISSOURI; UNITED States; MONETARY policy; FEDERAL Reserve banks; GROSS national product; FEDERAL Reserve Bank of St. Louis; EQUATIONS; ECONOMIC lag; FISCAL policy; MATHEMATICAL models
- Publication
Review of Economics & Statistics, 1971, Vol 53, Issue 4, p362
- ISSN
0034-6535
- Publication type
Article
- DOI
10.2307/1928737