| Summary: | 碩士 === 淡江大學 === 金融研究所 === 83 === This study investigates the effects of government spending
changes on a small open economy in an intertem- poral
substitution framework. According Equilibrium Approach,
temporary and permanent spending have different effects on
output and the balance of trade. Estimation of these effects
isolates the different channels through which government
spending can influence economic activity, so using the
decomposition methods developed by Beveridge and Nelson(1981)、
Cuddington and Winters(1987) and Miller (1988) to decompose the
time series of government spending into temporary part and
permanent part. The primary purposes of this study are using
the model developed by Ahmed(1986) and incorporating newly
developed cointegration and error correction model by
Johansen(1990), to test as follows: first, is the cointegration
relations existing under four variables? Second, the
feasibility of the Ricardian Equivalence theorem in Taiwan.
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