Taiwan's economy is in good shape with more-than-healthy productivity and output, but the government should be meticulous when making policies, as bad policies can reduce productivity, Edward Prescott, the 2004 Nobel laureate in economics, said in Taipei yesterday.
The government has been worrying that the industry migration to China would continue to shrink the nation's trade surplus and thus affect its economy, but Prescott said the trend does not present a problem.
Like Taiwan, the US has moved a lot of investments and jobs to India to save costs, especially in the software industry. But it has proven that there are big potential gains in India to develop better products, Prescott said. Besides, there is no solid statistical support for the large-scale outsourcing directly impacting the US job market, he said.
At yesterday's press briefing, Prescott also praised the government's financial reform by halving the number of financial holding companies. He said that to become a major global financial center, Taiwan needs big players to compete with international competitors.
Prescott, also a senior monetary adviser to the Federal Reserve Bank of Minneapolis, is in Taipei to attend the "2005 Chinatrust Global Leaders' Forum" today, where he will deliver a speech on the world's economic outlook, with reference to Taiwan.
Responding to a question whether the Chinese yuan's value will keep rising, the Nobel laureate said that the decision depends on the Chinese government. The previous slight revaluation of the currency was a brilliant and largely symbolic move to reduce anti-China sentiments in the US and Western Europe, and even Mexico, he said.
Furthermore, the Chinese government has made more efforts to balance trade between the US and China by investing abroad and buying aircraft from US aircraft maker Boeing Co, instead of letting huge amounts of dollars sit in the central bank of China, Prescott said.
As the US Federal Reserve may hike its benchmark interest rates for the 10th straight time next Tuesday because of surging oil prices and wages, Prescott said the trend may carry on to defeat inflation.
"I'll not be surprised if there is another interest-rate increase in another six weeks," Prescott said.
As for the question of who may become the next chairman of the Fed after Alan Greenspan, "well, I know it will not be me," he said.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary