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St. Louis Model for Macroeconomic Policy Determination in Relation to Employment Generation in a Developing Economy: Some Simulation Results

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  • David Umoru
  • Moses A. Erhi

Abstract

This study uses St. Louis model to econometrically answer the question of whether the Keynesian policy or the Monetarist’s policy was more efficacious on employment generation in Nigerian with quarterly data for sample period of 1992 to 2016. The empirical finding is that cumulative effects of Keynesian of increasing aggregate government spending on the growth rate of employment in Nigeria is dominant in contrast to Monetarist’s policy. The policy simulation results reported negative dynamic multiplier of -0.01 of monetary policy on employment; fiscal policy gave a dynamic employment multiplier of 0.12 respectively. The study thus bears out fiscal policy as more effectual in inducing employment in Nigeria by imposing positive feedbacks. The study remarks on feasible implementation of empirical finding.

Suggested Citation

  • David Umoru & Moses A. Erhi, 2017. "St. Louis Model for Macroeconomic Policy Determination in Relation to Employment Generation in a Developing Economy: Some Simulation Results," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 3(3), pages 24-32, September.
    • Handle: RePEc:khe:scajes:v:3:y:2017:i:3:p:24-32
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    References listed on IDEAS

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    More about this item

    Keywords

    Employment; St. Louis model; fiscal policy; monetary policy; Nigeria;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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