Since the conclusion of World War II, Taiwan, the Republic of China(ROC) has developed into an industrialized country following a long period of severe inflation. Taiwan has produced a successful example of economic development through export expansion. Exports and imports of Taiwan INCREASED FROM Approximately 10 percent of the gross national product(GNP)in the 1950s to more than 45 percent in the 1980s. The role of Taiwan 's foreign rates on exports and imports were examined in this study.
This study analyzed quarterly import and export data from 21 sectors between 1981 and 1991 to measure the effects of changes on the exchange rate. Variables included in the regression analysis were GNP of Taiwan and exchange rate for import demand functions and GNP of the U.S., export price index in Taiwan and Korea, and exchange rate for the export demand function. Prior to regression analyses, partial autocorrelation functions of the 21 import and commodity groups were estimated to determine the appropriate number of lags in the demand function.
