Effects of Fiscal, Monetary, and Exchange rate policies on Output in 12 Asian Economies, 1974-2007

Mohammed Nur Hussain and Nam Hoang

Applied Econometrics and International Development, 2014, vol. 14, issue 2

Abstract: Since the 1960s, the relative importance of monetary and fiscal policy in economic stabilization has been a matter of debate among monetarists and fiscalists. According to the monetarists’ view, monetary policy has had a more significant role than fiscal policy. On the other hand, the Keynesians School believes that fiscal policy is more powerful than monetary policy. So far, there have been a good number of empirical studies on the action of fiscal and monetary policy in developed and underdeveloped economies. Most of these studies emphasised different variables and different estimation procedures for analysing the effects of the two types of policy on output using a single equation. However, the findings have been equivocal. This study investigates panel data analysis to examine the effects of fiscal, monetary, Exchange rate policies on output in twelve selected Asian countries over the period 1974-2007. In order to test the relative strength of these two policies on output, the panel VAR technique utilized. The study reveals that the fiscal policy has a more powerful effect on output than the monetary policy in the case of these Asian economies.

Keywords: Fiscal Policy; Monetary Policy; Panel Vector Autoregression. (search for similar items in EconPapers)
JEL-codes: C33 E5 E62 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.usc.es/economet/reviews/aeid14214.pdf
No.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eaa:aeinde:v:14:y:2014:i:2_14

Ordering information: This journal article can be ordered from
http://www.usc.es/economet/info.htm

Access Statistics for this article

More articles in Applied Econometrics and International Development from Euro-American Association of Economic Development
Bibliographic data for series maintained by M. Carmen Guisan ().