Econometric Models and Computers: Manufacturing Economic Planning Projects in Taiwan

This paper explores the early use of mainframe computers to assist in econometric-knowledge production and economic-project planning in Taiwan in the 1960s. As an ally of capitalist countries during the Cold War, Taiwan received a myriad of technical aid programs from the United Nations and the United States in the 1950s and 1960s. This ranged from the construction of dams and sewage systems to the renting of IBM mainframe computers in building up the island’s economy. An IBM 1620 computer, installed at a Taiwanese university in 1964 through a United Nations technical-aid program, proved to be critical in economic planning as well as in local development projects.

Specifically, this paper explores the computer-assisted production of inter-industrial input-output analysis in Taiwan. Harvard economist Wassily Leontief developed the method in 1941.  U.S. economists and government officials have used the method since the 1950s to predict the effects of one industry’s changes on other industries in a national or a regional economy. With the availability of calculating devices able to handle arduous numerical operation involved in the analysis, governments across the globe, including India, France, and Taiwan, began using such analysis in the 1960s.  

In the case of Taiwan, a Cornell University Professor, Ta-Chung Liu, visited the country in 1964 to help form an economic-planning project. Liu helped a Taiwanese government agency to produce inter-industry input-output analyses of Taiwanese industries with the IBM 1620 computer. The limited capacity of the IBM computer however, hindered the process of producing such analysis. The Taiwanese team, thus, had to reconfigure economic data to accommodate the capacity of the computer. By using Taiwan as an example, this paper reveals the underlying historical tensions and contingencies in visualizing, representing, and making sense of economic activities during the Cold War.