International Business Essay

8788 Words Dec 1st, 2013 36 Pages
應 用 經 濟 論 叢 , 89 期 , 民 國 100 年 6 月

−153−

The Dynamics Analysis and Simulation of the Macro Economic Behavior of Taiwan’s Invigorating Economy Consumption Voucher
Wen-Chin Wei∗

Abstract
Given the severe global economic downturn, countries are using a variety of possible economic policies to try to help their economies recover. This study adopts system dynamics from the dynamic perspective to investigate how Taiwan’s decision to issue time-limited consumption vouchers will influence macro economical behaviors. The simulation led to following primary results. First, in regard to the highest marginal propensity to consume (MPC = 0.3) and the lowest substitution rate of consumption (SR = 0.6741), the distribution of the consumption
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Finally, when the government does not stick to the constant budget policy, the evidence indicates that the expansion of the distribution of consumption vouchers will not squeeze out government expenditures. The policy implication is that the distribution of consumption vouchers will yield a multiplier effect, which will further stimulate effective demand and contribute to Taiwan’s depressing economy. The possible crowding-out effects resulting from the consumption vouchers can be ignored, suggesting that the consumption voucher policy may ultimately be accepted as an effective approach to stimulate the economy.

Keywords: System Dynamics, Consumption Voucher, Multiplier Effect JEL Classifications: C61, E21

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應 用 經 濟 論 叢 , 89 期 , 民 國 100 年 6 月

−155−

The Dynamics Analysis and Simulation of the Macro Economic Behavior of Taiwan’s Invigorating Economy Consumption Voucher
Wen-Chin Wei

I. Introduction
The recent global financial tsunami has led to the deflation of the finance industry’s credit and reduced business investments. Meanwhile, Taiwan’s central bank has dropped interest rates six times in a row, but no significant predicted outcome has occurred. As a result, the public has continued to deflate its consumption, and firms have cut down on their investments; the public expenditure expansion policy has been too slow to save the bad situation (Zhang, 2009). Therefore, Taiwan’s government distributed consumption vouchers on January 18,

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