Equilibrium Real Exchange Rates Between NT Dollar and US Dollar and Economic Structural Changes

• Main Authors: Li, Kuan-Shu, 李冠樞
• Other Authors: Chia-Chao Nan
• Format: Others
• Language: zh-TW
• Published: 2003
• Online Access: http://ndltd.ncl.edu.tw/handle/31561940166167468761

碩士 === 淡江大學 === 國際貿易學系碩士在職專班 === 91 === The 1997 Asia financial crisis which was originated in Southeast Asia and spilled over to the whole world had brought about tremendous impact to the state of the division system among East Asian economies, but not so much to Taiwan’s economy during the period between June 1997 and the end of 1998. However, the blow out of domestic financial crisis after 1998 and the instabilities in the world economy as well as the domestic political situations had caused great changes in Taiwan’s economic structure. This article explores the structural change in Taiwan’s economy by examining the factors that determine the bilateral equilibrium real exchange rate between the NT dollar and the US dollar, which is generally considered to reflect both internal and external economic situations in the literature. The empirical studies involves the two-stage estimation of an error correction model introduced by Engle and Granger(1987) using the pre-1997 data set to search for both the long run and the short run determinants of the equilibrium real exchange rate. The estimated results are then acted as the foundation for predictions of the equilibrium real exchange rate after 1998. Finally, the predicted and the actual values of the real exchange rates are compared. Our empirical finding has shown that Taiwan’s economic structure in terms of the real exchange rates has changed dratically.