The Formation Mechanism Of Taiwan Stock Market Bubble And Economic Recovery

For Taiwan's outstanding performance in the 1997 Asian financial turmoil,previous research has basically attributed it to Taiwan's financial supervision and industrial structure.However,the reform of Taiwan's financial supervision and industrial structure was influenced by the Taiwan stock market crisis in the late 1980 s.Therefore,studying the formation mechanism of the stock market bubble and the subsequent economic recovery measures have critical value and reference significance.This paper reviews the Taiwan stock market crisis from 1987 to 1990.The research content is mainly divided into two parts: The first part is the analysis of the formation mechanism of the Taiwan stock market bubble from 1987 to 1990.Through the macroeconomic data and the main policies,the background of the bubble formation is provided.Further use the exchange rate,GDP,credit and stock market index data to conduct empirical tests to explore the reasons for the formation of the Taiwan stock market bubble;the second part is the study of Taiwan's economic restructuring after the stock market crisis,mainly through financial supervision,capital market and industrial structure transformation,etc.The analysis of the reasons for the Taiwan region's performance in the 1997 Asian financial turmoil.Through the Granger causality test and vector autoregressive and other empirical methods,the article draws the following conclusions.First,the main reason for the formation of the Taiwan stock market bubble in 1987-1990 was that in the context of the Taiwan authorities' intervention in the foreign exchange market to ease the appreciation of the Taiwan dollar,a large amount of money flowed from the credit channel to the capital market,and too much capital chased a small number of investment targets to drive the stock market.Overall,stock markets increase was sharp.Secondly,the main reason for Taiwan's successful defense against the 1997 Asian financial turmoil was the financial structure tending to dominate the market,the improvement of the economic structure and the strengthening of financial supervision.Finally,this paper proposes a policy proposal for the real estate bubble that has emerged on the mainland China,steadily implementing real estate tax,and promoting entity economic.