Whether an undervalued currency is an attainable industrial policy for developing countries’ sustained development has recently invoked many discussions. This paper studies the case of Taiwan after first determining the misalignment of Taiwan’s currency by estimating the fundamental...

The ongoing financial globalization has instigated growing concerns on the issue of benefits and costs from free international capital mobility. Past experiences in the emerging market countries indicate that foreign capital inflows could cause persistent current account deficits and lead to...