The purpose of this study is to develop a demand model for the pulp and paper in Taiwan. This led to the empirical demand model expessing current consumption as a linear function of industrial activity, current price, current stocks, lagged consumption, and lagged stocks. Major determinant factor of pulp consumption is production of total paper and paperboard, while paper consumption is real gross national product. For a 95 precent adjustmant of demand after changes in economic condition reguired a pericod of about 2.47 quarters for pulp, 2.04 quarters for paper.