| Summary: | 碩士 === 國立交通大學 === 經營管理研究所 === 96 === Taiwan lacks natural resources and highly relies on imported energy to meet internal demands. Over the past few years, the substantial rises in international raw material prices greatly affect Taiwan’s price level. This paper tries to examine cointegration and Granger causality between Taiwan’s consumer price index (CPI) and import raw material price indices, including crude oil, steel, copper, aluminum, corn and soybean and their related products with monthly data over the period 1991-2007. The empirical results imply that Taiwan’s CPI with those raw material price indices do not have a long-term equilibrium relationship. In terms of the short-run effect by applying Hsiao's version of the Granger causality method, causality running from import crude oil price index and corn price index to CPI is found without the consideration of feedback in Taiwan.
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