Cost-Price Changes Caused by External Shocks—The Case of 1973 Inflation

As the Taiwan economy had maintained a price stability for more than a decade, a sudden price rise in 1973 of 22.9% by a year average and 40.3% by end of year comparison, received serious attention. Being a small open economy, the Taiwan economy is easily affected by external shocks caused by changes in international prices and currencies. The price change in 1973 had a particularly complicated background.