Economics Division

I. Current Research Concentrations

In examining Taiwan's recent experiences-whether in production, trade, or banking--has gradually entered into a mature phase, and moreover, has led to rapid and expansive changes. The economics division intends to address Taiwan's economic evolution by using both theoretical and experimental (positivistic) approaches to conduct in-depth and broad-based research, as well as provide applicable policy advice. Through these approaches, the division hopes to abet Taiwan's economy to not only sustain high-levels of growth, but to achieve "fair" income distribution, as well as the symbolic goals of "equality" and "prosperity." Research topics and projects that research fellows in the economics division are currently conducting include the following:

(1) Research Areas:

  1. Labor Commuting Costs and Exclusion Theorem
  2. Exchange Rate Estimates, International Capital Liberalization, and Exchange Rate Stability
  3. Plans for Specialized Research in Economics
  4. Data-Banks of Longitudinal Follow-up Surveys on Income Distribution (part I)
  5. A Study on Employee Work Responsibilities During the Privatization of Public Enterprises
  6. The Collapse and Instability of Exchange Rate Policies
  7. A Measurement of Social Conflict and Social Consensus Levels
  8. A study of the Telecommunications Industry's Connection Rates and Universal Funds in Taiwan
  9. The Influence of Social Welfare Expenditures on the Overall Economy
  10. The Fisher Puzzle-the case of Taiwan (1980-1990)
  11. An Applied General Equilibrium Macroeconomic Model for Developing Countries
  12. A Study on Taiwan's Overall Model
  13. A Study on the Liquidizing Policies of the Central Bank
  14. An Experimental Study of Herd Behavior
  15. An Analysis on the Effects of Biotechnology Pollution Control within a Self-sustaining Ecological Unit
  16. Anticipated Depreciation, Wealth Effects, and Dual-Currency Exchange Rate as a Result of Wrong-Side Exchange Rate Adjustment: an analysis of wholesale (complete) liquidation measures and neutral intervention policies
(2) Current research projects
 
Chen Chau-Nan Exchange Rate Fluctuation Research
Mai Chao-Cheng Agglomeration Economy and Industrial Location (part III)
Tsaur Tien-Wang A Study on Wage and Income Inequality-an empirical analysis of Taiwan
Chu Yun-Peng Southeast Asia Economic Development and Income Distribution
A Study on Management Reform
Chu Wan-Wen Taiwan's Economic Development in the Post-War Period (III)
Tsai Chi-Yuan A Study on the Effects of Local Government Tiebout Education Expenditure
Chen Kong-Pin A Study on the Governmental Bidding System
Inter-organizational Power Struggles
Yang Chun-Lei Experiments on Simplified Sequential Games
Hwang Hong Interregional Trade and Optimal Plant Sites (II)

II. Future Research Focus

The research areas of research fellows in the economics division are quite diverse, thus providing room and flexibility for productive, collaborative research among fellows. While respecting each fellow's scholarly interests, the division's future research direction and development is focused on the following three areas:

  1. To continue conducting studies on "income distribution", in particular, in terms of strengthening research content as well as fostering greater inter-division research projects. Income distribution has been the economics division's main focus, while most of the studies are based on theoretical and empirical approaches. For the most part, studies consider how Taiwan can continue to maintain its economic growth, while simultaneously achieving "fair" income distribution. Due to the fact that as a topic, "income distribution" transcends research divisions, the fields of sociology, political science, and even law, can provide new research directions in this area. Consequently, the economics division continuously encourages its fellows to devote themselves to this form of research.
  2. To emphasize cross-disciplinary research. Research topics include: public choice; policy forms; politics and the economy; society and the economy; government expenditures; household economics; legal economics; political party behavior; and cross-straits economic development.
  3. To encourage economics-oriented research. Due to the formal and widespread impression of Taiwan as a newly developing country, and the fact that the country is already progressing towards becoming a developed country, numerous specialized, economic scholarly materials are currently gaining the attention of both the domestic and international academic arenas. These subject areas include: land development and environmental protection; industrial upgrading; telecommunications liberalization; international economic cooperation; and financial liberalization. The economics division will thus encourage its research fellows to devote themselves towards these specialized areas when planning research projects on Taiwan.
(1) Short-term Concentrations, Direction, and Research Areas
  1. High and low income economic class attributes distribution and income differences
  2. A study on wage and income inequalities--an empirical analysis of Taiwan
  3. Data banks on longitudinal follow-up surveys on income distribution
  4. East Asia and Southeast Asia economic development and income distribution
  5. Land tax system and land use
  6. An evaluation on post-war Taiwan industrial policy results
  7. Internationalization and Taiwan's industrial policies
  8. Interregional trade and appropriate factory sites
  9. A theoretical and empirical study of exchange rate fluctuations
  10. A study on currency shrinkage and the history of Chinese currency
  11. Currency devaluation and a double deficit open economy
  12. Choosing between categorical income and currency supply indexes
  13. The effects of the legal fee system on reconciliation rates and monetary awards
(2) Long-term Concentrations, Directions, and Research Areas

Aside from the aforementioned research topics, the division also promotes studies that require greater time, energy, and resources to conduct. Given a more generous timeframe and to the extent that the economics division can provide the necessary support, plans are being made to conduct research in the following areas:

  1. The economic development experience in post-war Taiwan
  2. The effect of the electoral system (including size of voting districts, voting ballot design) on candidate platforms and party vote getting practices
  3. Computable equilibrium patterns and income distribution
  4. Environmental policy and self-sustaining growth
  5. National defense expenditures and self-sustaining development
  6. Public deficit research
III.Past Research Accomplishments

Presently, the economics division has 13 full-time research fellows, one cross-division researcher, and one part-time researcher. In the last six years, the division's full-time research fellows have published a total of 244 articles as well as 92 conference papers. Among the published articles, 136 were printed in respected international journals. The topics covered in the articles range from income distribution, industrial organization, tax policies, game theory, open fixed pricing, management-labor negotiation, trade policy, as well as exchange rate systems. Not only are these studies insightful, but their findings have likewise raised Taiwan's status within the international academic community. In terms of their analyses, these research studies have positively contributed towards addressing Taiwan's economic, financial, and business problems as well. Moreover, it could be said that compared with other economics institutions in Taiwan, the level of research produced at ISSP's economics division is unparalleled [Hsu Song-Geng (1995, Economics Journal): "A brief analysis of academic accomplishments of Taiwan's three largest economic academic institutions"; published in an international scholarly journal-Academia Sinica Economics Division, Institute of Social Sciences and Philosophy, and National Taiwan University Economics department].

The following represents the division's more "breakthrough" research studies conducted this past year.

  1. Gini Coefficient and Negative Income

    This research study proposes that according to the Gini coefficient, measurements of negative income produce unequal distribution. This coefficient can be directly compared with a standard Gini coefficient. Moreover, this research methodology provides a simple comparative tool to the empirical study of international income distribution.

  2. An Investigation into Currency Substitution, International Inflation, and Substantial Exchange Rate fluctuation

    Given an economic system that legally allows one to hold both local and foreign currency simultaneously, the present study considers how foreign currency inflation rates generate fluctuations in the balance of trade and other trade conditions. This study also refutes the "neutral current" concept in the theory of international balance of payments. The findings of this study clarify the effects of currency substitution on the exchange rate policy.

  3. Information Externality and Optimal Plant Location

    Not only does the present study insert localization economies or diseconomies, urbanization economies or diseconomies, as well as information communication economies or diseconomies into the heart of the plant model, it likewise incorporates the behavior of household budgetary units into the model. As for the breakthrough growth of location theory, it is believed that development in this area will have significant policy implications for the establishment of Taiwan's Asia-Pacific Operations Center.

  4. The Influence of WTO Membership on Industrial Structure and Income Distribution in Taiwan

    This study utilizes calculable balanced models to estimate the effects of the Uruguay Round agreement, namely, how will tariff reductions on the importation of agricultural products affect the structure of Taiwan's manufacturing industry? Specifically, how would these policies impact the following four types of households: agricultural employers, agricultural employees, self-managed agriculturists, and non-farming households. Findings demonstrate that by developing the high-quality trade manufacturing and service industries, the agricultural sector likewise benefits. In terms of income, non-farming households are most likely to experience benefits; however, advantages to self-employed farmers and employers are limited, while those least likely to receive advantages are self-employed farming households.

  5. Measurement of Social Consensus Levels

    This study incorporates research methods from both economic and sociology, and through mathematical economic analysis established a general index that tests/measures "social consensus levels" in order to measure the social consciousness of society towards certain issues. This index will particularly aid social research scholars in terms of directional changes in public opinion within Taiwanese society.

  6. Cooper-Zinc Duopoly

    The copper-zinc duopoly is essentially where two industrial companies each possess a mutually beneficial production elements, and whose products are completely replaceable in a duopoly market. Within the modern economic market, the international telecommunications and electrical power markets are part of the copper-zinc duopoly market. This study reveals that: the copper-zinc duopoly's threat towards economic welfare is none other than a monopoly, and moreover, the level of harm towards industries is progressively increasing. These findings will abet the drafting of governmental control policies in this area.

  7. Tax Evasion and Government Tax Collection

    This study relies upon the efficiency wage theory and the wage bargaining theory in order to examine the relationship between individuals' tax evasion behavior and government tax collection. The conclusions suggest that the tax evasion behavior can likely become an advantage to the government's tax revenue, which prove to be a rather ironic and contradictory phenomenon.

  8. Readjustments to the Game Equilibrium Condition

    This study utilizes the concept of the renegotiation-proof equilibrium to expand upon conditions in which information is incomplete. According to nature of this type of equilibrium, it has been proven that equilibrium efficiency is unattainable under conditions of incomplete information. This study has likewise added the notion of "fairness" into the equilibrium condition in the hopes of identifying more reasonable and greater anticipation behaviors.