Sho-Chieh Tsiang (; August 25, 1918 – October 21, 1993) was a Chinese-American economist. He was born in China but resided primarily in the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...

from 1949 until his death. He also resided in Taiwan in 1948 and in the 1980s. He was the father-in-law of

Lars Peter Hansen Lars Peter Hansen (born 26 October 1952 in Urbana, Illinois) is an American economist. He is the David Rockefeller Distinguished Service Professor in Economics, Statistics, and the Booth School of Business, at the University of Chicago and a ...

(2013

Nobel Prize in Economics The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...

laureate).

Life and career

He studied at Keio University and

London School of Economics The London School of Economics and Political Science (LSE) is a public university, public research university located in London, England and a constituent college of the federal University of London. Founded in 1895 by Fabian Society members Sidn ...

(B. Sc. Economics 1941, Ph.D. Economics 1945) under

Friedrich Hayek Friedrich August von Hayek ( , ; 8 May 189923 March 1992), often referred to by his initials F. A. Hayek, was an Austrian–British economist, legal theorist and philosopher who is best known for his defense of classical liberalism. Haye ...

and received the Hutchinson Silver Medal 1944–45. He served as Professor of Economics at National Peking University, 1946–48, staff economist at the International Monetary Fund, member of Academia Sinica, and Professor of Economics at

University of Rochester The University of Rochester (U of R, UR, or U of Rochester) is a private university, private research university in Rochester, New York. The university grants Undergraduate education, undergraduate and graduate degrees, including Doctorate, do ...

and

Cornell University Cornell University is a private statutory land-grant research university based in Ithaca, New York. It is a member of the Ivy League. Founded in 1865 by Ezra Cornell and Andrew Dickson White, Cornell was founded with the intention to tea ...

. He was founding director of the Chung-Hwa Institute for Economic Research, serving from 1981 until his resignation in 1993 due to illness. Tsiang's academic contributions include work on the

demand for money In monetary economics, the demand for money is the desired holding of financial assets in the form of money: that is, cash or bank deposits rather than investments. It can refer to the demand for money narrowly defined as M1 (directly spendable ...

, monetary theoretic foundations of the monetary approach to the balance of payments, an early statement of the relation between spot and forward exchange rates, and the role of money in trade balance stability. However, together with his lifelong friend and colleague Ta-Chung Liu, also a professor at Cornell University, gave practical advice to the Republic of China on economic policy. Together they advocated against central planning and for creating an environment that encouraged private enterprises to compete on world markets. They were able to convince members of the government, such as Economic Minister,

Kwoh-Ting Li Li Kwoh-ting (; 28 January 1910 – 31 May 2001) was a Taiwanese economist and politician best known as the "Father of Taiwan's Economic Miracle" and referred to by the New York Times as the "Godfather of Technology" in Taiwan for his work in tr ...

of the soundness of their views. Their advice was implemented, beginning with foreign exchange reform in beginning in 1958. Tsiang advocated the unification of multiple exchange rates and the devaluation of the New Taiwan dollar from artificially overvalued levels. Understanding that Taiwan at that time had cheap labor relative to the world market, he advocated for a liberalization of interest rate controls to promote savings and produce funds for investment for small enterprises, and proposed low tariffs to encourage exports. In this way, Taiwan could exploit its comparative advantage in labor-intensive goods on the world market. This was counter to prevailing policy recommendations by economists of the day, for whom "import substitution" was a common policy prescription where subsidization of domestic heavy industry was seen as a fast track to modernization. He also wrote for the public audience in Taiwan, engaging in lively public debates while director of the Taiwan Institute for Economic Research and later, the Chung-Hua Institution for Economic Research.

Selected writings

* Tsiang, S.C. "The 1951 improvement in the Danish balance of payments." IMF Staff Papers, vol. 3, 1953, pp. 155–170 * Tsiang, S.C. "Liquidity preference and loanable funds theories, multiplier and velocity analysises: a synthesis," American Economic Review, vol. 46, 1956, pp. 539–64. * Tsiang, S.C. "The Theory of Forward Exchange and Effects of Government Intervention on the Forward Exchange Market", 1959, IMF Staff Papers. * Tsiang, S.C. "The Role of Money in Trade-Balance Stability: Synthesis of the Elasticity and Absorption Approaches", 1961, American Economic Review, vol. 51, 1961, pp. 912–936. * Tsiang, S.C. "A Model of Economic Growth in Rostovian Stages", Econometrica, vol. 32, 1964, pp. 619–648. * Tsiang, S.C. "Walras' Law, Say's Law and Liquidity Preference in General Equilibrium Analysis", International Economic Review, vol. 7, 1966, pp. 329–345. * Tsiang, S.C. "The Precautionary Demand for Money: an Inventory Theoretical Approach", Journal of Political Economy, vol. 76, 1968. * Feldstein, M.S. and Tsiang, S.C. "The Interest Rate, Taxation, and the Personal Savings Incentive", Quarterly Journal of Economics vol. 82, 1968, pp. 419–434. * Tsiang, S.C. "A Critical Note on the Optimum Supply of Money", Journal of Money, Credit and Banking, vol. 1, 1969, pp. 266–280. * Tsiang, S.C. "The Rationale of the Mean-Standard Deviation Analysis, Skewness Preference, and the Demand for Money", American Economic Review, vol. 62, 1972, pp. 354–371. * Tsiang, S.C. "Risk, Return, and Portfolio Analysis: Comment", Journal of Political Economy, vol. 81, 1973, pp. 748–752. * Tsiang, S.C. "The Dynamics of International Capital Flows and Internal and External Balance", Quarterly Journal of Economics, vol. 89, 1975, pp. 195–214. * Tsiang, S.C. "The Monetary Theoretic Foundation of the Modern Monetary Approach to the Balance of Payments", Oxford Economic Papers, vol. 29, 1977, pp. 319–338. * Tsiang, S.C. "Fashions and Misconceptions in Monetary Theory and Their Influences on Financial and Banking Policies", Zeitschrift furGesamte Staatswissenschaft, vol. 135, 1979, pp. 594–604. * Tsiang, S.C. "Keynes's 'Finance' Demand for Liquidity, Robertson's Loanable Funds Theory, and Friedman's Monetarism", Quarterly Journal of Economics, vol. 94, 1980, pp. 467–491. * Tsiang, S.C. "Taiwan's economic miracle: lessons in economic development," in A.C. Harberger, editor, "World Economic Growth; Case Studies of Developed and Developing Countries," Institute for Contemporary Studies, San Francisco, CA, 1984.

Life and career

Selected writings

References

Further reading