A Study on Foreign Trade in Taiwan Influenced by Subprime Mortgage Crisis—Based on VAR Model Analysis

• Main Authors: Ching-Fang Tseng, 曾靜芳
• Other Authors: Jin-Long Liu
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/54487106347150937281

碩士 === 國立中央大學 === 產業經濟研究所碩士在職專班 === 100 === Taiwan is a region highly dependent on foreign trade. China and US are two countries that are the most trade partners for Taiwan export, while Japan and US are two most importing countries. The financial crisis occurred in 2008 has had a great impact on the global economy. The thesis, based on the analysis of VAR Model, discusses Taiwan’s foreign trade which is influenced by other countries’ foreign trade demands, exchange rates, wholesale price indexes, foreign trade price indexes and explanation of estimated error during the period of the subprime mortgage crisis. An empirical analysis on export and import demand was carried out using the data collected for December, 2005 to December, 2011. In addition, to highlight the overall financial crisis, the period from January, 2008 to December, 2010 is chosen to be the research range for comparison. We estimate separately the export and import demand model, in which the export demand was focused on the analysis of China and US, while the import demand was emphasized on Japan and US. The empirical results show that Taiwan’s exports were influenced on the previous periods of exports.This outcome in line with the estimated positive tendency of the VAR Model, explained that the higher Taiwan’s export to China and US is in the last period or last two periods, the higher the export will be in the current period. In addition, Taiwan’s export will be influenced by the exchange rate. The empirical results show that the depreciation of exchange rates has a positive effect on export which is the same as the positive tendency estimated by the VAR Model. It is also in line with the literatures which focus on the influence of Taiwan’s exchange rate made to its economy, namely, currency, depreciation (appreciation) of NTD is favorable (unfavorable) to the export. Also, trade was greatly impacted by the subprime mortgage crisis and the cost of import was increased by the depreciation of exchange rates. Overall, our empirical results show that Taiwan’s export and import were highly influenced by the financial crisis and the impacts were smoothly disappeared after 20 months.