The Relationship between China and Taiwan in Macro-economics
Date Issued
2014
Date
2014
Author(s)
Chang, Chih-Yao
Abstract
Since China and Taiwan separated in 1949, the cross-strait economic communication was completely cut off. After the China’s economic reform was carried out in 1978 and Taiwan removed the Martial Law in 1987, due to similar language, culture and location, the cross-strait economic communication began to warm up gradually. The Sunflower Student Movement erupted on 18th March 2014 in Taiwan. The protest not only continued nearly a month but also received worldwide media coverage. With regard to the Cross-Strait Service Trade Agreement (CSSTA), Taiwan academia appears to have different arguments. Supporters advocate that free trade will bring economic benefits for Taiwan. Opponents then believe that Taiwan’s domestic industries will be damaged through asymmetry competition from China.
To analyze CSSTA, this paper is to build Taiwan’s macro-econometrics model and use it for discussing the relationship between China and Taiwan in macro-economy. This model contains private and public sectors and consists of not only goods, money, finance and labor markets but also a lot of definition equations and time-series ordinal least square estimation equations. Each estimation equation exists linked layout. The same variable can be the dependent variable in one estimation equation and the independent variable in another estimation equation. Through definition equations, the model can connect every market and sector and capture Taiwan’s transitional mechanism in macro-economy by using economic theories and statistic methods.
After construction of this model, first of all, to execute the in-sample and out-of -sample forecast for long-run trend in Taiwan’s macro-economy based on Gauss-Seidel numerical approach and ensure good fitness of the model with four fitness indexes. Then, to enter into scenario analysis and observe Taiwan’s impulse response in macro-economy by China’s Gross Domestic Product and China’s investment amount in Taiwan. According to the model forecast, China’s Gross Domestic Product operates through net export, factor income from abroad and financial account. China’s investment amount in Taiwan operates through stock amount. The growth of these two variables will bring economic benefits for Taiwan.
Subjects
兩岸經貿
《海峽兩岸服務貿易協議》
總體經濟計量模型
中國大陸國內生產毛額
中國大陸投資我國金額
Type
thesis
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