Review

Jerry L. Jordan describes the theoretical and policy-related issues of the late 1960s that led him and Leonall C. Andersen to develop what is now called the Andersen-Jordan approach. First, they viewed their research as a sequel to work by Friedman-Meiselman, Brunner-Meltzer, and others who had demonstrated the general potence of monetary policy actions.

Dallas S. Batten and Daniel L. Thornton examine the controversy that emerged following the publication of the 1968 Andersen-Jordan article. Andersen and Jordan’s basic finding—that monetary actions have a lasting impact on economic activity while fiscal actions do not—generated immediate criticism, most of it econometric in nature, the authors note.

Keith M. Carlson reviews the development of the monetarist econometric model that he and Andy published in the April 1970 Review article and presents an updated version, comparing it with the original model.

Leonall C. Andersen’s best-known contributions, both to the economics profession at large and to the reputation of the Federal Reserve Bank of St. Louis in monetary policy matters, appeared in two articles in this Review. “Monetary and Fiscal Actions: A Test of Their Relative Importance in Economic Stabilization,” co-authored with Jerry L. Jordan, was published in November 1968.

Another of Andersen’s best-known contributions, “A Monetarist Model for Economic Stabilization,” co-authored with Keith M. Carlson, was published in April 1970; it developed a small monetarist macroeconomic model that has been used for policy purposes at this Bank and elsewhere.