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Investigating Fiscal and Social Costs of Recovery Policy: A Dynamic General Equilibrium Analysis of a Compound Disaster in Northern Taiwan

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  • Michael C. Huang

    (National Graduate Institute for Policy Studies)

  • Nobuhiro Hosoe

    (National Graduate Institute for Policy Studies)

Abstract

We investigate a long-run impact of a compound disaster in northern Taiwan by describing a recovery process from the disaster with a dynamic computable general equilibrium model. After simulating losses of capital and labor in combination with a nuclear power shutdown, we conduct policy experiments that are aimed at recovery of Taiwan’s major industries by subsidizing their output or capital use. We found that the semiconductor industry could recover but need a huge amount of subsidies while the electronic equipment sector could almost recover even without subsidies. Capital-use subsidies would cost less than output subsidies. When we use two-year longer duration for a recovery program of semiconductors, we could save the subsidy costs by 7–10%.

Suggested Citation

  • Michael C. Huang & Nobuhiro Hosoe, 2015. "Investigating Fiscal and Social Costs of Recovery Policy: A Dynamic General Equilibrium Analysis of a Compound Disaster in Northern Taiwan," GRIPS Discussion Papers 15-01, National Graduate Institute for Policy Studies.
    • Handle: RePEc:ngi:dpaper:15-01
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    References listed on IDEAS

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    1. Chen, Yen-Heng Henry, 2013. "Non-nuclear, low-carbon, or both? The case of Taiwan," Energy Economics, Elsevier, vol. 39(C), pages 53-65.
    2. Chow, Gregory & Lin, An-loh, 2002. "Accounting for Economic Growth in Taiwan and Mainland China: A Comparative Analysis," Journal of Comparative Economics, Elsevier, vol. 30(3), pages 507-530, September.
    3. Fukushige, Mototsugu & Yamawaki, Hiroshige, 2015. "The relationship between an electricity supply ceiling and economic growth: An application of disequilibrium modeling to Taiwan," Journal of Asian Economics, Elsevier, vol. 36(C), pages 14-23.
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    5. Michael C. Huang & Nobuhiro Hosoe, 2014. "A General Equilibrium Assessment on a Compound Disaster in Northern Taiwan," GRIPS Discussion Papers 14-06, National Graduate Institute for Policy Studies.
    6. Nobuhiro Hosoe, 2014. "Japanese manufacturing facing post-Fukushima power crisis: a dynamic computable general equilibrium analysis with foreign direct investment," Applied Economics, Taylor & Francis Journals, vol. 46(17), pages 2010-2020, June.
    7. Tsai, Chung-Hung & Chen, Cheng-Wu, 2011. "The establishment of a rapid natural disaster risk assessment model for the tourism industry," Tourism Management, Elsevier, vol. 32(1), pages 158-171.
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