| Summary: | 碩士 === 國立嘉義大學 === 應用經濟學系研究所 === 104 === Central banks in emerging market countries in the face of foreign capital inflows will result in increased interest rates and the appreciation of their currencies in favor of an overall prudent reserve requirement an additional tool to tighten lending conditions. This study estimates structural auto-vector regression models to investigate the different impacts of interest rate and reserve requirement shocks on the macro-economy which is using the data of Taiwan. Both shocks tighten lending conditions and decrease output, indicating the interest rate policy and reserve policy are substitutes. However, the interest rate shock affects the capital inflows, exchange rate appreciation, declining current account balances and price level, while the reserve requirement shock influences the capital outflows, exchange rate depreciation, increasing current account balances and price level. Two different effects highlight the interest rate policy and reserve requirement policy as complementary. Finally, our results further support that reserve requirement policy transmits its effect mainly through the bank lending channel.
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