S-Space College of Social Sciences (사회과학대학) Institute of Economics Research (경제연구소) Seoul Journal of Economics (SJE) Seoul Journal of Economics vol.12(3) (Fall 1999)
The U.S. and Taiwan Trade Balance Revisited : A Comparison of the Instrument Variable and the VAR Models
- Issue Date
- Seoul Journal of Economics, Vol.12 No.3, pp. 271-294
- The single factor that lies at the core of Taiwan's remarkable economic growth is sustained export growth. During the past twenty-five years, the balance of trade between the U.S. and Taiwan has its share of volatility. Taking variables from different theories, we employ the instrument variable and the VAR model to dissect the problem. It ought to be pointed out that the private sector interest rate instead of the official rate plays a key role in the model. The substantial investment in mainland China from Taiwan has distorted the trade balance picture.