Sources of dynamic macroeconomic fluctuations in small open economies: The case of Taiwan (China).

摘要

Scope and method of study. This paper employs the restricted Karras (1993) model to investigate the six structural shocks to the macroeconomic fluctuations for U.S. from 1973 to 2001, Taiwan from 1981 to 2000, Korean from 1980 to 2000 as well as Japan from 1983 to 2001. The six structural innovations were postulated: oil, fiscal, (non-oil) aggregate supply, monetary, (non-fiscal, non-monetary) aggregate demand, and exchange rate disturbances. The restricted Karras model is used to derive the IRFs and FEVDs for the four countries.; Findings and conclusions. The results of these four countries support the following propositions to some extent: (1) Monetary innovations increase output and price level. (2) Aggregate demand shocks have positive effects on output. (3) Aggregate demand disturbances increase price level in the short run. (4) In the cases of the U.S. and Japan, increases in the budget deficit tend to depreciate the exchange rate; the effect is even more obvious in the long term. But this finding is not supported in the cases of Taiwan and Korea. (5) Price (inflation) shocks have permanent effects on output for the U.S. and Taiwan. But the results of the cases of Japan and Korea are controversial in that their outputs are not decreased by the inflation shocks. (6) Price (inflation) shocks have a long run effect on price level. (7) Fiscal, money, AS, and AD are important for the business variation for the four countries. (8) Inflation is the mixed effect of many individual shocks.