Abstract
Because Taiwan is export-oriented and highly connected with the US in terms of trade, Quantitative Easing (QE) of the Federal Reserve System (FED) had significant negative impacts on Taiwan. We examine several possible solutions for these negative impacts via the Delphi technique and the Analytic Hierarchy Process, synthesizing judgements from experts. The empirical results point out that a “negative influence on international trade affairs” is the predominant main criteria, and “improvement of international trade and investment regulations”, “easing the impact of increases in the prices of raw materials obtained internationally”, and “raising the competitiveness of the nation’s export industry” are important sub-criteria. Especially, “improvement of international trade and investment regulations” corresponds with the global imbalance phenomenon. To strengthen the trade environment in Taiwan, experts suggest that an overall improvement in balance of payment is necessary that encompasses investment activities and trade regulations. We look forward our results offering useful suggestions.
Highlights
Since the subprime mortgage crisis in the US in 2008, there has been an economic recession there
We propose three ways to ease these inverse impacts [1] [2] [3] [4] as follows: a) Control hot money flooding into Taiwan originating from US Quantitative Easing (QE) policies US QE policies depreciated the US dollar and relatively appreciated Asian currencies
As for the sub-criteria, the top 5 were “improvement in regulations on International trade and investment (0.166)”, “Easing the impact from increases in the prices of raw materials obtained internationally (0.125)”, “increasing the competitiveness of the nation’s export industry (0.113)”, “controlling the structured revolution to ease trade friction (0.106)”, and “controlling the flood of hot money originating from the US QE into Taiwan (0.101)”
Summary
Since the subprime mortgage crisis in the US in 2008, there has been an economic recession there. Financial institution lending has contracted, diminishing consumption and employment in the US and lowering internal demand in the US This crisis threatened its corresponding trade partners, emerging countries in Asia, via lessening Asia’s exports and further diminishing its GDP. This negative influence became a global contagion that further induced a global economic recession. Since March 2009, the Federal Reserve System (hereafter FED) proposed QE policies in three rounds and Operation Twist (hereafter OT) in one round. This process was stopped in October 2014 since the US economy was getting better
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