The Effect of Monetary Policy and Fiscal Policy: the Comparison between the Two Financial Storms

• Main Authors: His-hung Chen, 陳錫宏
• Other Authors: Mei-yin Lin
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/34984404631210439283

碩士 === 世新大學 === 經濟學研究所(含碩專班) === 99 === The impacts of monetary policy and fiscal policy on the economic fluctuation have been widely discussed. This paper uses Ordinary Least Squares (OLS) simple linear regression model to analyze the macroeconomic effects of changes in government fiscal expenditure and money supply. The sample countries comprise Taiwan, Korea, Hong Kong, Singapore, Malaysia. Besides, I set the dummy variables to indicate the periods of financial storms and include the interactional terms as additional regressors to discuss the effects of monetary policy and fiscal policy in Asian Financial crisis and USA Subprime Mortgage crisis. The empirical result shows that the policy effect on economic growth was not significant for the case of Taiwan and Korea in Asian Financial Crisis because of the time lag of policy. However, Malaysia had used Exchange Control and adopted fixed-exchange rate system. Reducing interest rate and increasing money supply had resulted in apparently positive effect in Asian Financial Crisis period for Malaysia. In USA Mortgage Crisis period, there exist the time lags for the monetary policy in Taiwan, Singapore and fiscal policy in Hong Kong. Singapore practiced some policies like increasing liquidity immediately, reducing tax rate, and offering guarantee work opportunity which had positive effect on economic growth.