March 2023  
European and American bank liquidity panic brings doubts to the global economic outlook
Under the boost of domestic demand, all three composite indicators issued by TIER rose synchronously
Observing the recent international economic situation, the failure of three regional commercial banks in the United States and the financial crisis of Credit Suisse in Europe have caused liquidity panic in the financial market to heat up. Although the successive problems in the banking sector in the United States and Europe may lead to tightening credit conditions for households and enterprises, which will affect private consumption and investment performance, the US Federal Reserve (Fed) and European Central Bank (ECB) still believe that their banking systems are resilient and systemic risks are controllable. In addition, Fed and ECB both considered the inflation pressure as still serious at present; therefore, the Fed and ECB decided to hike the key interest rate by 25 bps and 50 bps respectively in March. In terms of domestic manufacturing, benefiting from the increase in the number of working days with respect to lower base effect, domestic enterprises have accelerated the pace of resumption of work and production helping the demand for production and goods to pick up. The service industry has been benefited from the full COVID unblocking this year and the domestic demand is still strong, so the related service industry was also quite optimistic about the economic performance for the present and the near future. Regarding construction industry, since the public construction has been started one after another, which significantly surged the optimism of construction sector. As a result, the manufacturing, service and construction composite indicators issued by the Taiwan Institute of Economic Research (TIER) rose in chorus in February. ...Read more
Taiwan plans to import labor from more countries
Taiwan is talking to more countries to import labor, with memorandums of understanding likely to be signed during the second half of the year, Labor Minister Hsu Ming-chun said on March 22nd. As the discussions had made significant progress but had not been completed yet, she was not yet willing to reveal the country or countries involved, with the actual importation of migrant labor unlikely to begin during 2023, CNA reported. Despite the COVID-19 pandemic, progress had been achieved by video conferencing and with assistance from the Ministry of Foreign Affairs (MOFA), Hsu said. The minister emphasized that the new migrant workers would be scheduled to work in the sectors already open to foreign labor, mostly care and manufacturing. At present, Indonesians are predominantly caregivers but also work in factories, while manufacturing mostly employed people from the Philippines and Vietnam, and construction sector workers from Thailand. Turning to demands from hotels to open up the employment of migrant labor, Hsu said the government still preferred to promote the use of older workers and of women returning to the workforce (Source: Taiwan News).

Taiwan central bank hikes 2023 CPI growth forecast to over 2% (Source: Focus Taiwan).
Talent shortage top issue for chipmaking industry (Source: Taipei Times).
Taiwan Economic Research Monthly
Should the government policy go to extremes or the middle way?
There are usually three ways for individuals to do things and for the government to design and implement policies. One is not to do it, one is to go all out, and the other is to work hard to a certain extent. The third is considered as the golden approach advocated by the ancients. In fact, these three methods may be applicable to different situations, and it is not necessarily the best way. This choice of best practice exists in a variety of issues, but economics often claims to be the science of optimal choice or solution, and economic policy is almost daily confronted with debates about the strength of policy, such as how much to boost economic sentiment or drive down prices and so on and so forth. Therefore, economic researchers should pay more attention to the question of whether the policy should go to extremes or the middle way. However, in the research of economic theory, the possibility of extreme approaches is often assumed away, and some policy discussants often make the assumption that there will only be extreme practices. This article will analyze the possible factors that lead to extreme practices or the golden mean, so that everyone can think about whether it is related to their own assumptions when putting forward extreme or moderate claims.
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