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FISCAL AND MONETARY POLICY
May 6, 2012
Sustainable economic growth with relatively stable price level and substantial improvement in the societal welfare has been the drive of policy institutions. In this respect both the monetary and fiscal policies are used as the major tools for macroeconomic stabilization and economic growth .However, the relative effectiveness of the two policies has been a major concern to economist and policy makers with advocacy ranging from monetarists, fiscalists and both policy coordination. Monetarists such as Milton Friedman and Meiselman, (1963), And(1968) have used the st Louis equation to provide empirical evidence in favor of the monetary policy .This monetarists approach has attracted criticism from on the basis that the st Louis equation is a reduced form equation wh...
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