A Macro-econometric Research on Government Policy in Taiwan
Date Issued
2008
Date
2008
Author(s)
Lin, Li-Cyuan
Abstract
The purpose of this study is Taiwan’s macroeconometric modeling, and using the model to analysis the effects of government’s different policies on macroeconomy. According to the economic situations of Taiwan, this study assumes three different policies, including monetary policy, fiscal policy, and exchange rate policy, then assess and analysis them under different scenarios separately. 1) Monetary policy: under the situation that central bank considers that raises rediscount rate by gradual adjustment or one-time adjustment. Like the central bank does, gradual adjustment has smaller negative influence on macroeconomy, but relative smaller effects on dampening prices. 2) Fiscal policy: To finance a temporary investment expenditure through tax could raise outputs and no significant crowding-out effects on private investment. Otherwise, government issues bonds could raise fiscal burden and have negative effects on economy in the long run. 3) Exchange rate policy: The central bank intervenes in appreciation or depreciation of NT dollars just performs the trade-off of economic growth and price level stabilization. Therefore, given the long-run economic development, the central bank should avoid over intervening exchange rate, and let it be decided by market mechanism.
Subjects
macroeconometric model
policy simulation
policy analisis
scenarios simulation
simultaneous equations
SDGs
Type
thesis
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