The Persistence of Inflation in Switzerland: Evidence from Disaggregate Data

This paper investigates persistence of Swiss consumer price inflation using aggregate and disaggregate inflation data covering 1983-2008. We document that persistence of sectoral inflation rates is below persistence of aggregate inflation. Our main finding is that inflation persistence significantly declines in the early 1990s. An estimated factor model reveals that inflation persistence stems from a persistent component that is common to inflation rates across sectors. Both the relevance and the persistence of the common component decline over time. Depending on the sample period and aggregation level, 70 to 90 percent of the variance in sectoral inflation rates is accounted for by short-lived sectoral factors

The Impact of Local Genome Sequence on Defining Heterochromatin Domains

Characterizing how genomic sequence interacts with trans-acting regulatory factors to implement a program of gene expression in eukaryotic organisms is critical to understanding genome function. One means by which patterns of gene expression are achieved is through the differential packaging of DNA into distinct types of chromatin. While chromatin state exerts a major influence on gene expression, the extent to which cis-acting DNA sequences contribute to the specification of chromatin state remains incompletely understood. To address this, we have used a fission yeast sequence element (L5), known to be sufficient to nucleate heterochromatin, to establish de novo heterochromatin domains in the Schizosaccharomyces pombe genome. The resulting heterochromatin domains were queried for the presence of H3K9 di-methylation and Swi6p, both hallmarks of heterochromatin, and for levels of gene expression. We describe a major effect of genomic sequences in determining the size and extent of such de novo heterochromatin domains. Heterochromatin spreading is antagonized by the presence of genes, in a manner that can occur independent of strength of transcription. Increasing the dosage of Swi6p results in increased heterochromatin proximal to the L5 element, but does not result in an expansion of the heterochromatin domain, suggesting that in this context genomic effects are dominant over trans effects. Finally, we show that the ratio of Swi6p to H3K9 di-methylation is sequence-dependent and correlates with the extent of gene repression. Taken together, these data demonstrate that the sequence content of a genomic region plays a significant role in shaping its response to encroaching heterochromatin and suggest a role of DNA sequence in specifying chromatin state

Nominal Stability and Swiss Monetary Regimes Over Two Centuries

This paper documents nominal stability in Switzerland from 1805 to 2013 using a data set on annual price, wage and nominal GDP changes. The trends of these indicators are estimated by an unobserved-components stochastic-volatility model in order to control for short-term fluctuations and measurement error. Based on a narrative analysis of these trends five main findings emerge. (i) Fiat currency regimes in Switzerland provided a relatively stable monetary background even compared to the metal-currency regimes before WW1. (ii) The flexible inflation targeting regime adopted in December 1999 has performed best over the last two centuries measured by today's definition of nominal stability. (iii) Fiat currency regimes without clearly communicated nominal price anchor (Bretton Woods System and monetary targeting) were characterised by an inflation bias. (iv) The metal-currency regimes (competing currencies and bimetallism before World War 1, and to some extent flexible inflation targeting, were associated with a deflation bias. (v) Persistent deflations in terms of the CPI only occurred under metallic regimes before WW2. These episodes were accompanied by falling nominal GDP, falling employment but relatively stable hourly wages

Interventions Versus Customer Transactions: An Alternative Test of the Signalling Hypothesis

The intra-daily efficacy of interventions by the Swiss National Bank (SNB) is examined for the 1986–94 period. The paper extends results from earlier studies because it uses the actual intervention exchange rates and all SNB interventions are known to the market. Our test of the signalling hypothesis, which distinguishes between interventions and customer transactions, is similar in spirit to US studies that exploit the informational differences between reported and unreported interventions. A key finding is that only initial interventions matter; customer transactions and subsequent interventions have no influence.exchange rate intervention; signalling hypothesis

Are Interventions Self-Exciting?

It is often argued that interventions provide news on changes in risk premia or in future monetary policy. If so, the timing of interventions offers important information for central bank watchers. One method to study the reaction function of a central bank is to consider whether the duration intervals of past interventions matter for future interventions. The time deformation of interventions is modelled as an autoregressive process following the class of ACD models first proposed by Engle and Russell (1994). The analysis considers the persistence of interventions by the Federal Reserve, the Bundesbank and the Swiss National Bank.Duration; exchange rate intervention