The St. Louis Equation: A Decade Later

Allen, Stuart D.; Seaks, Terry G.

doi:10.2307/1057150

Cited by 8 publications

(2 citation statements)

References 8 publications

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“…The long list of contributions in this regard should start with the influential paper by Friedman and Meiselman (1963), where the authors tested the relationship between money and aggregate expenditure for the US economy, and could go on with, among others, the contributions by Andersen and Jordan (1968), Meiselman and Simpson (1971), Keran (1970aKeran ( , 1970bKeran ( , 1970c, Sims (1972), Carlson (1978), Dewald and Marchon (1978), Hafer (1982), Batten and Hafer (1983), Batten and Thornton (1983), Chowdhurry et al (1986), Kretzmer (1992), Becketti and Morris (1992) and Rasche (1993). However, these 'monetarist' results have also been questioned and challenged by many others: Poole and Kornblith (1973), Waud (1974), Lombra and Torto (1974), Williams et al (1976), Friedman (1977), Vrooman (1979), Feige and Pearce (1979), Seaks and Allen (1980), Cooley and Leroy (1985), Darrat (1986), Spencer (1989), Chowdhurry (1986aChowdhurry ( , 1986b and Friedman and Kuttner (1992).…”

Section: A Dichotomized View Of the Economic Process: The Trammissionmentioning

confidence: 99%

Regional Monetary Policy

Fuentes¹

2005

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With the final phase of the European Monetary Union under way concern has been raised over the regional implications of the European Central Bank's (ECB) Monetary Policy. Departing from the standard approach utilized by the ECB, this book provides a comprehensive theoretical framework to explore the ways through which money and monetary policy may affect regions. Regional Monetary Policy examines the role that the banking system and the liquidity preference of economic agents play in the transmission of central banks' monetary policy decisions to regions within a country or countries within a currency union. This book utilizes a unique framework built upon the basic principles of the Post Keynesian monetary theory which enables the identification of a new way for money and monetary policy to have a regional impact: the behavioural effect. This book will prove essential reading for all students of economics and politics as well as readers interested in the development of the European Union.

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Section: A Dichotomized View Of the Economic Process: The Trammissionmentioning

confidence: 99%

Regional Monetary Policy

Fuentes¹

2005

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“…Following Carlson, the Goldfeldt Quandt test was employed to check that the transformed equation did not suffer from heteroscedasticity (Carlson, 1978). The procedure employed by Seaks and Allen (1980) was used to check the use of endpoint restrictions on the Almon Lags. Endpoint restrictions should not be employed as a routine matter and should always be tested because they could create the impression of a lag when none exists (Schmidt & Waud,1973).…”

Section: South African Versions Of the St Louis Equationmentioning

confidence: 99%

The St Louis Equation and the South African Economy: Some Preliminary Results

Rogers

Morgenrood

1984

South African J Economics

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(2) THE ST LOUIS EQUATION has featured prominently in the debate between the monetarists and the Keynesians over the impact of monetary and fiscal actions on economic activity. AS is well known the Keynesians are critical of the reduced form approach, arguing that the St Louis equation is misspecified and that the results are consequently biased in favour of the monetary variable (Stein, 1980; Desai, 1981, ch. 3;Batten & Hafer, 1983). A complete evaluation of the St Louis approach would therefore require an analysis of these objections, although a cursory examination of the issues involved indicates that they generate more heat than light. Nevertheless the objective of this paper is to estimate various versions of the St Louis equation for the South African economy and evaluate the results from the South African perspective. It is shown that both traditional and export versions can be estimated after making certain minor adjustments to the St Louis specification. Evaluating these results from a South African perspective then leads to the conclusion that the St Louis equation is not helpful in evaluating the 'effectiveness' of monetary and fis cal policy. Furthermore the St Louis equations are, estimated over a period in which the money supply was not (or could not have been) effectively controlled by the authorities. Estimations of the St Louis equations for South Africa therefore provide no indication (at present) of the ability of the authorities to control the money supply. They could, however, serve as a useful reference point from which to monitor the impact of any change in the monetary system which would be conducive to a more effective control of the money supply. The St Louis Equation: Results for the United StatesAs a point of reference it is useful to begin with the St Louis equation as estimated 1984 SAJE v52 (2) p173 for the US economy. The equation is now typically presented as:where Y is nominal GNP, M is some measure of the narrow money supply (one or other version of M1) and E is a measure of fiscal policy: either high employment expenditure or the high employment budget surplus. The dots above the variables represent annual compounded percentage rates of change: ao, mi and ei are parameters to be estimated and ξ(t) is a stochastic error term. Typical results obtained from the estimation of (1) for the US economy are presented in Table I South African Versions of the St Louis EquationIn this section we present estimates of both the traditional and export versions of the St Louis equation for the South African economy. When estimating the traditional form of the equation for the South African economy the GNP and E variables obviously have to be modified. As South Africa does not publish a series on the high employment budget surplus an alternative proxy for the fiscal variable must be used. For this purpose we have employed total exchequer issues excluding debt redemptions and although cyclical influences have not been removed it generates typical St Louis equation results. As for the dependent v...

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The Andersen-Jordan equation revisited

Batten¹,

Thornton²

1985

Journal of Macroeconomics

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The St. Louis Equation: A Decade Later

Cited by 8 publications

References 8 publications

Regional Monetary Policy

Regional Monetary Policy

The St Louis Equation and the South African Economy: Some Preliminary Results

The Andersen-Jordan equation revisited

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