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Will Taiwan's Economy be Marginalized by China? A Macro-economic Policy Coordination Approach

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  • Kuo-Chun Yeh

Abstract

In Taiwan, economic marginalization has become a major concern that has resulted from the fast growing Chinese economy, imbalanced cross-strait economic and political relations, and a failure to participate in important international trade and financial organizations. Is a China-Taiwan policy cooperative mechanism the best choice for Taiwan's economic welfare? This paper is to measure Taiwan's economic marginalization by an international policy coordination approach instead of the conventional free trade agreements. We simulate macro-economic adjustments of Taiwan and its main economic partners (China and the US) according to the different institutional scenarios and economic shocks. The baseline simulation and sensitivity analyses imply that at the current stage policy coordination between China and Taiwan cannot come into effect without the US's participation.

Suggested Citation

  • Kuo-Chun Yeh, 2009. "Will Taiwan's Economy be Marginalized by China? A Macro-economic Policy Coordination Approach," Global Economic Review, Taylor & Francis Journals, vol. 38(1), pages 77-99.
    • Handle: RePEc:taf:glecrv:v:38:y:2009:i:1:p:77-99
    DOI: 10.1080/12265080802692704
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    References listed on IDEAS

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    1. World Bank, 1993. "Global Economic Prospects and the Developing Countries 1993," World Bank Publications - Books, The World Bank Group, number 32388.
    2. Daniel H. Rosen & Nicholas Lardy, 2004. "Prospects for a US-Taiwan Free Trade Agreement," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa73, April.
    3. Petit,Maria Luisa, 2009. "Control Theory and Dynamic Games in Economic Policy Analysis," Cambridge Books, Cambridge University Press, number 9780521127158.
    4. Robert Mundell, 2000. "Currency Areas, Exchange Rate Systems and International Monetary Reform," Journal of Applied Economics, Universidad del CEMA, vol. 3, pages 217-256, November.
    5. Robert A. Mundell, 2000. "A Reconsideration of the Twentieth Century," American Economic Review, American Economic Association, vol. 90(3), pages 327-340, June.
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    Cited by:

    1. Boldea, O. & Engwerda, J.C. & Michalak, T. & Plasmans, J.E.J. & Salmah, S., 2011. "A Simulation Study of an ASEAN Monetary Union (Replaces CentER DP 2010-100)," Other publications TiSEM e92b4cbf-8cde-4a19-83e2-8, Tilburg University, School of Economics and Management.
    2. Wang Hao, 2022. "National identities and cross-strait relations: challenges to Taiwan’s economic development," ZFW – Advances in Economic Geography, De Gruyter, vol. 66(4), pages 228-240, November.
    3. Engwerda, J. & Boldea, O. & Michalak, T. & Plasmans, J. & Salmah,, 2012. "A simulation study of an ASEAN monetary union," Economic Modelling, Elsevier, vol. 29(5), pages 1870-1890.

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