| Summary: | 碩士 === 南華大學 === 管理經濟學系經濟學碩士班 === 97 === Taiwan is facing a baby bust, with an aging population affecting important social issues such as retirement levels and demand for health care, as well as leading to a decline in the size of the working population, which could affect economic growth. Existing literature on the relationship between changes in population structure and economic growth has focused on the use of cross-sectional or panel data; however, little of this has been based upon Taiwan. The main aim of this paper, therefore, is to examine the way that changes in demographic structure are affecting economic growth in this country.
This paper follows the theoretical framework provided by Bloom and Williamson (1998), applying this to data from 1954 to 2007 in order to analyze the affect of a changing population structure on Taiwan’s economic growth. The empirical results show of this show that demographic changes are certainly affecting our country’s economic development. The growth rate of per capita income is used here as an indicator of economic growth, and is found to be affected in several ways. Capital dilution means that an increase in the growth rate of the overall population has a negative effect on the growth rate of per capita income, but a larger working population, longer life expectancy and greater human capital stock all have significant positive affects on economic growth. Furthermore, increases in physical capital have a significant and negative affect on economic growth, which may be a result of physical capital not having reached the system’s steady state level.
This paper not only discusses the ways in which demographic changes are affecting economic growth in Taiwan, but also attempts to add population structure variables into a model of economic growth, which is then used to produce a sample forecast of future growth. The accuracy of this prediction is then compared to the forecasts published on the official websites of the Directorate General of Budget, Accounting and Statistics (DGBAS) and the Institute of Economics at the Academia Sinica (IEAS), in order to determine if the inclusion of demographic variables could improve the forecasts produced by economic modeling. Analysis using RMSE and MSE shows that an economic model incorporating demographic data produces more accurate forecasts than those of the DGBAS and IEAS. However, Diebold & Mariano (1995)’s asymptotic test suggests that the DGBAS and IEAS forecasts are roughly equivalent in accuracy to the one produced by our model.
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