Review the process of economic development in Taiwan, one can observe that there is a significant patern in GNP's relative shares of agricuture, industry and service. It implies that there must exist the interdependence among the structural adjustment of these three sectors. In addition, Taiwan is an island economy, the macro or trade factors, such as real exchange rate, foreign reserve and domestic absorption, etc. are specially important. Meanwhile, for agricultural sector, the share of product value has declined significantly since 1970s. This phenomenon can be explained by change in the consumption behavior of consumers or the different productivities among sectors. But it seems be ignored from the macro and trade point of view to understand the fading path of agricultrual development in Taiwan. The main purposes of this project are: firstly, to combine the theory of Dutch Diseases and econometric method and analysis the switching of industrial structure in the process of economic development in Taiwan. Secondly, for the countries like Japan and Taiwan, "learning by doing" is an important characteristics in economic growth. Throughout the project, the effect and the role of "learning by doing" to individual industry and the whole economy in economic growth of Taiwan, will be considered. Thirdly, agriculture is currently a minor industry in Taiwan, the reasonable causes except the micro-factor to know the future path of agriculture in Taiwan is considered. Finally, the structural adjustment of agricultural products in the future is predicted. By applying the time series data from 1952 to 1991, the main empirical results can be summarized as following: (1) Learning-by-doing effect has significant and positive impact on economic growth in Taiwan. (2) For individual sector, there is no learning-by-doing effect in agricultural sector. (3) The period of 1946 - 1973 is the switching period of agricultural and industrial sectors. (4) Real exchange rate is indeed an important factor to the structures of industries.