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Essays On The Determination Of Equilibrium Real Exchange Rate For Taiwan, 1981-1993, Mei-Ling Chen

All Graduate Theses and Dissertations, Spring 1920 to Summer 2023

Taiwan is one of the four smaller Asian economies. Before 1960, Taiwan pursued industrialization policies by limiting imports of manufactured goods, gradually adopting an open and outward-oriented economic policy, believing it would expend exports and yield gained ground.

With this increasingly open and outward-oriented economic policy as the background, we will study the real exchange rate (RER) misalignment in Taiwan over the period 1981-93. The RER plays a critical role in maintaining external competitiveness. Hence, from the policy point of view, this rate should not be allowed to deviate much from its equilibrium level. Since the equilibrium real exchange rate …