| Summary: | 碩士 === 國立中山大學 === 經濟學研究所 === 104 === Taiwan is an island surrounded by sea, so the economic growth mostly relies on international trade. Our paper is subject to discuss that the exports impact on the economic growth and follows Tai-Hsin,Huang(2002)” The Causality Export and Economic Growth: The Empirical Study of Taiwan.” to find variables can be explained why exports affect the economic growth. Then, we use Banerjee et al.(2014)”Factor-augmented error correction models”(FECM) to retest the relationship in variables.
The FECM resolve the defect that the Vector Auto Regressions (VAR) and the Error Correction models (ECM) can’t be contained too much variables. Besides, we can forecast more accurate than ECM by including lots of related variables.
In theory, according to Export-Led Growth Hypothesis, exports accumulate domestic funds which can be used to purchase technologies and capitals. Therefore, we know the relationship between exports, capitals and economic growth.
In empirical, this paper selected 79 seasonal data from 1982 Q1 to 2015 Q4 in Taiwan. We find that export, GDP, output, Fixed Investment and Terms of Trade have a cointegration, in other words, Export, GDP, output, Fixed Investment and Terms of Trade will tend to balance in the long run. On the other hand, FECM is proved that have better forecasting abilities than ECM.
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