Market External Events as Triggers of the 1991-1997 Residential Construction Peak in Taiwan

Hui-Yuan Hsieh and John Forster
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Hui-Yuan Hsieh: Department of Business Administration, National Pingtung University of Science and Technology, Pingtung Taiwan
John Forster: School of Business and Management, The American University of Sharjah, Sharjah United Arab Emirates AND Department of Accounting, Finance and Economics, Griffith University, Brisbane Australia

Economic Analysis and Policy, 2007, vol. 37, issue 1, 15-40

Abstract: Between 1991 and 1993 the construction of residential units in Taiwan rose to triple normal levels. Identifying the surge as an event as opposed to a fluctuation in the production time-series, we ask what triggered this surge in physical production. Price mechanisms within the Taiwanese housing market offered no solution, and only limited help in deciding which of many market-external events affected production. This forced an exhaustive examination of large numbers of market-external events as potential triggers and intensifiers of the production surge. This approach led to different conclusions from all earlier analyses. A complex sequence of triggers and their interactions that intensified the surge is presented. This interpretation stands opposed to previous mono-causal explanations. This new interpretation – multiple unique events interacting to trigger and intensify another unique event – indicates limits to econometric methods in empirical economics. Consequently specific attention is paid to the development of a qualitative methodology.

Keywords: Housing; Residential (search for similar items in EconPapers)
JEL-codes: R31 R52 (search for similar items in EconPapers)
Date: 2007
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