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Copyright of Taiwan Economic Forecast & Policy is the property of Institute of Economics, Academia Sinica, Taiwan Economic Forecast & Policy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Taiwan Economic Forecast & Policy is the property of Institute of Economics, Academia Sinica, Taiwan Economic Forecast & Policy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Taiwan Economic Forecast & Policy is the property of Institute of Economics, Academia Sinica, Taiwan Economic Forecast & Policy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Taiwan Economic Forecast & Policy is the property of Institute of Economics, Academia Sinica, Taiwan Economic Forecast & Policy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Taiwan Economic Forecast & Policy is the property of Institute of Economics, Academia Sinica, Taiwan Economic Forecast & Policy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Taiwan Economic Forecast & Policy is the property of Institute of Economics, Academia Sinica, Taiwan Economic Forecast & Policy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Taiwan Economic Forecast & Policy is the property of Institute of Economics, Academia Sinica, Taiwan Economic Forecast & Policy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Taiwan Economic Forecast & Policy is the property of Institute of Economics, Academia Sinica, Taiwan Economic Forecast & Policy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Taiwan Economic Forecast & Policy is the property of Institute of Economics, Academia Sinica, Taiwan Economic Forecast & Policy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Taiwan Economic Forecast & Policy is the property of Institute of Economics, Academia Sinica, Taiwan Economic Forecast & Policy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Taiwan Economic Forecast & Policy is the property of Institute of Economics, Academia Sinica, Taiwan Economic Forecast & Policy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Taiwan Economic Forecast & Policy is the property of Institute of Economics, Academia Sinica, Taiwan Economic Forecast & Policy and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We find that the transitory tax effect is larger andmore statistically signifi- cant than the permanent tax effect when we distinguish between these two ef- fects in the empirical specification. Our results are consistent with the estimates fromprevious studies on the tax effects on capital gains realization, and suggest that taxpayers aremore responsive to transitory tax changes than to permanent tax changes. Taxpayers are more responsive to transitory tax changes because transitory tax changes create opportunities for tax arbitrage by means of time shifting. Therefore, policy evaluations based on conventional estimateswithout distinguishing between the permanent effect and the transitory effect may be misleading. Nevertheless, we may need further analyses to clarify whether or not our results are applicable to all land trading, since this study is based only on self-used residential land. [ABSTRACT FROM AUTHOR]

Building high voltage overhead transmission lines (HVOTL)may incur huge external social cost. This study attempts to estimate such external cost using the Taipower Company's Nantou-Changlin HVOTL as a case study. This HVOTL likely affects the values of farmland. Data were collected from a field survey de- signed from the contingent valuation method (CVM). An econometric model using farmland price as the dependent variable was specified and estimated by two-stage least squares (2SLS) and Heckman two-step model (Heckit). The econometric results show that building this HVOTL would reduce the value of farmland within 600 meters from this line with 23.6 km on both sides. The closer to HVOTL, the lower is the farmland price. The total lost farmland value amounts to 17.1 billion NT dollars. This amount is more than six times the construction cost of 2.7 billion. These research results should be very useful to the Taipower Company and government agencies in assessing the external social cost of the construction of HVOTLs in Taiwan. [ABSTRACT FROM AUTHOR]

This research employs data published by the Taiwan Central Bank to address the degree of pass-through, immediate impact and adjustment speed of retail bank interest rates, including deposit rates and lending rates, in response to changes in the offical rate, represented by the overnight interest rate of the interbank call-loan market. The empirical evidence from linear and threshold cointegration models suggests that the pass-through from the offical rate to deposit rates is incomplete, and that to lending rates is complete or overshooting in the long run. For both deposit rates and lending rates, the immediate impact from changes in the offical rate is less than the magnitude of long run pass-through, indicating sluggish adjustment. And the mean adjustment lag of a complete pass-through for deposit rates is less than two months. Besides, this research also examines whether interest rate rigidity is different when the offical rate is increasing or decreasing. It is concluded that both deposit rates and lending rates are more rigid when they are rising. Evidence of rigidity of deposit rates increases supports the collusive hypothesis and the rigidity of lending rates increases coincides with the hypothesis of adverse customer reaction and asymmetric information. [ABSTRACT FROM AUTHOR]

As an alternative to the method currently used by the Council for Economic Planning and Development (CEPD), we apply the least angle regression (LARS) method proposed by Efron et al. (2004) to select the macroeconomic series used to construct composite business indicators. We use a two-step approach. First, we obtain 103 macroeconomic series and assign each of them to one of three subgroups - leading, coincident and lagging - based on their ability to predict the reference cycle series. Second, within each subgroup, we rank the assigned series based on their ability to predict the reference cycle series and construct a composite business indicator based on these rankings. Our results suggest that the macroeconomic series selected via the LARS method tend to agree with those currently used by the CEPD. However, the power of the selected macroeconomic series to predict reference cycle series varies with the size of the sample selected. Moreover, the composite leading indicator constructed from the macroeconomic series selected via the LARS method predicts turning points of the business cycle more effectively than the existing CEPD leading indicator. [ABSTRACT FROM AUTHOR]

The trade forecast for Taiwan conducted by the Chung-Hua Institution for Economic Research (CIER), the Directorate-General of Budget, Accounting and Statistics (DGBAS), and the Institute of Economics, Academia Sinica (IEAS) has received considerable attention from decision makers in the private and public sectors. We evaluate the forecasting performance of the three institutions in terms of the conventional criteria and the usefulness tests recently developed by Lin et al. (2011). More specifically, we analyze the samples for the annual and quarterly projections released by CIER, DGBAS and IEAS from 1996 to 2010. Our findings are as follows. First, the directional accuracy statistics show that the one-year-ahead annual projections are generally well produced. Second, Ashley's usefulness statistics indicate that the current-quarter forecasts released by those institutions perform the best. In addition, based on the tests for usefulness (Lin et al., 2011), the annual forecasts have also done a good job. Overall, the current year forecasts (prepared in the middle of the same year) produced by DGBAS and the next-year forecasts (prepared at the end of each year) produced by IEAS perform the best. Meanwhile, the current-year forecasts for the changes in trade between Taiwan and specific countries produced by CIER also provide useful information. [ABSTRACT FROM AUTHOR]

This study uses both themulti-regional and single-country computable general equilibrium (CGE) models and the social accounting matrix (SAM) database to provide an economy-wide analysis of the impacts of the cross-strait Economic Cooperation Framework Agreement (ECFA) on Taiwan's labor demand and income distribution, under the formation of the "ASEAN plus China, ASEAN plus Japan, ASEAN plus Republic of Korea" regional trade agreements (RTAs). Simulation results show that, if the ECFA "Early Harvest Program" is implemented, the amount of overall labor demand is expected to increase by 33,000 jobs (+ 0.319%); if a comprehensive trade liberalization of industrial products according to ECFA is put into force, the overall labor demand will increase by 119,000 jobs (+1.214%). Overall, ECFA will benefit all levels of household income. However, the biggest beneficiaries of cross-strait trade liberalization are the highest income group families. The Gini's coefficient increases with the greater market openness, indicating that the trade liberalization will worsen the economic inequality problem in Taiwan. [ABSTRACT FROM AUTHOR]