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On measuring the effects of fiscal policy in global financial crisis: Evidences from an export-oriented island economy

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  • Hong, Cheng-Yih
  • Li, Jian-Fa

Abstract

Following the 2008 financial crisis, Taiwan implemented various fiscal policies so that they could offset the shocks from the financial crisis. In the present study, we investigate whether these two fiscal policies alleviated the shock generated by the 2008 financial crisis on Taiwan's economy and unemployment. The findings provide that the economic and employment effects generated by the public work investment project were the most substantial in the public sector. By contrast, the economic and employment effects generated by the consumption vouchers policy were the largest in the service sector. These outcomes are closely related to Taiwan's industry structure. The fiscal multiplier of the public investment project and consumer vouchers distribution was 1.94 and 1.47. The evidence in the present study also seems to suggest that the two fiscal policies examined could not induce an effective long-term transformation of Taiwan's economic system.

Suggested Citation

  • Hong, Cheng-Yih & Li, Jian-Fa, 2015. "On measuring the effects of fiscal policy in global financial crisis: Evidences from an export-oriented island economy," Economic Modelling, Elsevier, vol. 46(C), pages 412-415.
    • Handle: RePEc:eee:ecmode:v:46:y:2015:i:c:p:412-415
    DOI: 10.1016/j.econmod.2014.12.023
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    References listed on IDEAS

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    6. Cheng-Yih Hong & Yi-Chain Lee & Ming-Che Tsai & Yi-Chi Tsai, 2018. "Agricultural Sector Input Technical Coefficients, Demand Changes and CO2 Emissions after the Financial Crisis: Environmental Input-Output Growth Factor Model Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 8(6), pages 339-345.
    7. Ryu-ichiro Murota & Yoshiyasu Ono, 2015. "Fiscal Policy under Long-run Stagnation: A New Interpretation of the Multiplier Effect," ISER Discussion Paper 0937, Institute of Social and Economic Research, The University of Osaka.
    8. Cheng-Yih Hong & Yu-Shuang Yen & Tsai-Rong Lee, 2019. "The Spillover Effects of Investment, Economic Growth and Electricity Consumption: An Application Mathematical Dynamic Industry-Related Models Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 9(3), pages 313-319.
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