Abstract
This paper briefly reviews the published arguments and criticisms related to the famous Andersen – Jordan (1968) St. Louis equation. The improvements and critiques that have evolved over the past forty-five years are outlined and a new set of refinements are offered. Agreeing with Wilkins’ (2013) argument for using a lagged dependent variable, a fresh empirical analysis is performed by the author. A new private consumption dependent variable is employed; monetary aggregates rather than monetary base are used, as is total government spending rather than surpluses or deficits, although those are also run for comparison. Endogeneities are fleshed out by adding unemployment and inflation gapvariables. Ultimately, the results here show no empirical support for aggregate demand management, either fiscal or monetary, effectively altering private consumption.
Recommended Citation
Vias, Peter V.
(2015)
"Some Tweaks to the Andersen – Jordan St. Louis Equation,"
Journal of Business, Industry, and Economics: Vol. 20, Article 3.
Available at:
https://roar.una.edu/jobie/vol20/iss1/3