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The Efficacy of Fiscal Vs Monetary Policies in the Asia-Pacific Region: The St. Louis Equation Revisited

Ghanashyama Mahanty, Dwijendra Nath Dwivedi and Badri Narayanan Gopalakrishnan

Vision, 2023, vol. 27, issue 2, 256-263

Abstract: This study’s main objective is to assess the relative importance of fiscal and monetary policies on the Asia-Pacific Economies. We have empirically investigated both the original St. Louis equation and its expanded version to study the comparative relevance of one over the other. Our empirical results indicate that both monetary and fiscal policies are essential in promoting economic growth. In both models, monetary policy is more effective than fiscal policy. In the expanded St. Louis model, exports, exchange rate and inflation variables substantially impact gross domestic product than the conventional monetary and fiscal measures.

Keywords: Monetary Policy; Fiscal Policy; Economic Growth; Panel Data (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1177/09722629211054148

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Handle: RePEc:sae:vision:v:27:y:2023:i:2:p:256-263