During the COVID-19 pandemic, the world GDP growth rate declined, however, Taiwan's GDP growth rate is still positive. This study aims to shed light on what makes Taiwan such a different country compared to other countries. I set up a three-sector small open economic model to explore what will happen if there is a shock in price, demand, supply, and change in substitutability. With the numerical method, this study found that shocks in price will cause interest rates higher than the natural interest rate, thus, having a negative effect on consumption. Also, this study found that shock in the foreign sector, such as shock in foreign demand for home tradable goods or shock in supply for foreign tradable goods, has a negative effect on consumption. This paper also finds that changes in elasticity of substitution have a positive effect on consumption, this study claim that it might be the reason that Taiwan's GDP growth rate is still positive during the pandemic.

第一章 Introduction 1
第二章 Outline of model 4
第二章第一節 Household 4
第二章第二節 Traded goods firm 6
第二章第三節 Non-traded goods firm 7
第二章第三節第一小節 Price setting 7
第二章第三節第二小節 Aggregate Output of Non-tradable Goods Firm 8
第二章第四節 Transportation Firm 9
第二章第五節 Monetary Policy rules 9
第三章 Steady State
第四章 Conclusion

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