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Impact of Monetary and Fiscal Policies on Real Output

Author

Listed:
  • G. S. Laumas

    (Southern Illinois University)

Abstract

The major innovation of this paper is to jointly estimate the effects of anticipated and unanticipated monetary and fiscal policies on real output. Previous studies had analyzed the impact of either monetary or fiscal policy on real output. The real output equation indicated a break in 1971 which led to the estimation of the output equation for two sample periods. During the sample period from 1960:3 to 1971:1, anticipated and unanticipated fiscal policy along with unanticipated monetary policy affected real output. In the second sample period only the fiscal policy variables had impact on real output; monetary variables did not have a lasting impact real output.

Suggested Citation

  • G. S. Laumas, 1991. "Impact of Monetary and Fiscal Policies on Real Output," Eastern Economic Journal, Eastern Economic Association, vol. 17(2), pages 157-163, Apr-Jun.
  • Handle: RePEc:eej:eeconj:v:17:y:1991:i:2:p:157-163
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume17/V17N2P157_163.pdf
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    References listed on IDEAS

    as
    1. Mishkin, Frederic S, 1982. "Does Anticipated Monetary Policy Matter? An Econometric Investigation," Journal of Political Economy, University of Chicago Press, vol. 90(1), pages 22-51, February.
    2. Barro, Robert J, 1977. "Unanticipated Money Growth and Unemployment in the United States," American Economic Review, American Economic Association, vol. 67(2), pages 101-115, March.
    3. Sargent, Thomas J, 1976. "The Observational Equivalence of Natural and Unnatural Rate Theories of Macroeconomics," Journal of Political Economy, University of Chicago Press, vol. 84(3), pages 631-640, June.
    4. Rose McElhattan, 1982. "On federal deficits and their economic impact," Economic Review, Federal Reserve Bank of San Francisco, issue Sum, pages 6-17.
    5. Stephen M. Goldfeld, 1976. "The Case of the Missing Money," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 7(3), pages 683-740.
    6. Barro, Robert J, 1978. "Unanticipated Money, Output, and the Price Level in the United States," Journal of Political Economy, University of Chicago Press, vol. 86(4), pages 549-580, August.
    7. Lucas, Robert E, Jr, 1973. "Some International Evidence on Output-Inflation Tradeoffs," American Economic Review, American Economic Association, vol. 63(3), pages 326-334, June.
    8. Makin, John H, 1982. "Anticipated Money, Inflation Uncertainty and Real Economic Activity," The Review of Economics and Statistics, MIT Press, vol. 64(1), pages 126-134, February.
    9. Laumas, G S & McMillin, W D, 1984. "Anticipated Fiscal Policy and Real Output," The Review of Economics and Statistics, MIT Press, vol. 66(3), pages 468-471, August.
    10. Fischer, Stanley, 1977. "Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 191-205, February.
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    More about this item

    Keywords

    Fiscal Policy; Monetary; Policy;

    JEL classification:

    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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