| Summary: | 碩士 === 中國文化大學 === 國際貿易學系 === 100 === About the effects of the terms of trade changes on real income and trade balance, in the 1950’s Harberger and Laursen and Metzler argued that an adverse shock to the terms of trade will worsen the current account balance. In the 1980’s Matsuyama argued that, because the factor intensities of the production sectors are different, the effects of the terms of trade changes on trade balance are different, too. According to Harberg- er-Laursen-Metzler’s frame of effective theory, this paper is to establish empirical model including whole Taiwan and specific product’s terms of trade, real income and trade balance. And by using empirical process of structural vector auto regression model, im-pulse response function and forecast error variance decomposition, it is to estimate dy-namic effects. Empirical results show that an unanticipated positive shock to the terms of trade in Taiwan as a whole lead to an immediate and adverse effect on Taiwanese real income and Taiwanese trade balance. This is not consistent with HLM effect. But unan-ticipated positive shocks to the terms of trade for the machinery and electronic equip-ment industry, plastic products industry and chemical products industry in Taiwan lead to immediate and positive effects on Taiwanese real income and industrial trade balance, which is consistent with HLM effect but textile industry. This paper shows that the dif-ferences between factor intensities of specific products do not affect the relationship among the industrial terms of trade ,real income and industrial trade balance.
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