GDP Data Revisions and Forward-Looking Monetary Policy in Switzerland

This paper analyzes forward-looking rules for Swiss monetary policy in a small structural VAR model consisting of four variables taking into account data revisions for GDP. First, the paper develops an analytical method to analyze the effect of data revision errors in GDP on the ex ante or conditional inflation-output-growth volatility trade-off and applies it to Swiss data. Second, the effects of different targets in a forward-looking monetary policy on ex post or unconditional volatility of inflation and output growth is explored by a simulation exercise. In general, the results obtained suggest that focusing monetary policy on GDP growth instead on inflation may lead to an inefficient policy with both increased medium term inflation and GDP growth volatility in the presence of GDP data revisions.Structural VAR, forward-looking monetary policy, efficiency frontier, GDP data revisions

The Analysis of Forward-Looking Monetary Policy in a SVAR Framework

This paper analyzes forward-looking monetary policy rules in structural VAR’s. First, an approach for modeling a monetary policy which aims at a strict medium term inflation or output growth target is developed. Second, the ex ante inflation-output-growth volatility trade-off for a forward-looking policy aiming at a convex combination these strategies is derived. Finally, an illustration of our approach using Swiss data is given.Structural VAR, forward-looking monetary policy, efficiency frontier

Measurement errors in GDP and forward-looking monetary policy: The Swiss case

This paper analyzes forward-looking rules for Swiss monetary policy in a small structural VAR consisting of four variables. First, the paper looks at the ex ante inflation-output-growth volatility trade-off for a forward-looking policy aiming at a convex combination of a strict inflation and output growth targeting rule implied by this SVAR model. Thereby the paper introduces a new analytical method. Second, the paper considers the effect of measurement errors in GDP on this inflation-output-growth volatility trade-off. Third, the paper works at the impact of changing beliefs about the potential growth rate on the variability of output growth and inflation. Finally the effects of different targets in a forward-looking monetary policy on ex post or unconditional volatility of inflation and output growth is explored by a simulation exercise. --Structural VAR,forward-looking monetary policy,efficiency frontier,GDP measurement errors

The Analysis of Forward-Looking Monetary Policy in a SVAR Framework

This paper analyzes forward-looking monetary policy rules in structural VAR’s. First, an approach for modeling a monetary policy which aims at a strict medium term inflation or output growth target is developed. Second, the ex ante inflation-output-growth volatility trade-off for a forward-looking policy aiming at a convex combination these strategies is derived. Finally, an illustration of our approach using Swiss data is given

GDP Data Revisions and Forward-Looking Monetary Policy in Switzerland

This paper analyzes forward-looking rules for Swiss monetary policy in a small structural VAR model consisting of four variables taking into account data revisions for GDP. First, the paper develops an analytical method to analyze the effect of data revision errors in GDP on the ex ante or conditional inflation-output-growth volatility trade-off and applies it to Swiss data. Second, the effects of different targets in a forward-looking monetary policy on ex post or unconditional volatility of inflation and output growth is explored by a simulation exercise. In general, the results obtained suggest that focusing monetary policy on GDP growth instead on inflation may lead to an inefficient policy with both increased medium term inflation and GDP growth volatility in the presence of GDP data revisions

Discussion: Swiss Monetary Policy 2000-2009

NoneInflation targeting; SNB; empirical reaction functions; Taylor rule

Wie gross ist der zukünftige Anpassungsbedarf bei der AHV? Rückblick 1948-1998 und Ausblick 1998-2048

Given the demography what are the additional revenues needed to finance the benefits of the Swiss Old Age and Survivor Insurance? A retrospective from 1948 to 1998 shows that the benefits of this insurance became increasingly difficult to finance in the past. Prospective simulations from 1998 to 2048, based on official demographic forecasts, show that in the long run with the current level of contributions, revenue cover seventy per cent of the expenditures provided that the productivity grows with one per cent per annum. This coverage is even three quarters if the growth of productivity is 1.5 per cent. The coverage ratio can be used to measure the financial impact in the long run of future reforms of the Swiss Old Age and Survivor Insurance.

A Strange Animal? The Swiss Franc Exchange Rate as a "Captured" Random Walk

The paper aims to describe the behavior of the Swiss Franc - Deutsch Mark exchange rate between January 1980 and December 1998. Contrary to research results provided for other currencies a random walk is not sufficient to describe the empirical characteristics of the Swiss Franc. A regime switching approach shows that changes in the spot rate levels alternate between two regimes: a random walk and an autoregressive process. Mean reverting forces exist that "capture" the random walk within elastic bounds. Equally, we find that the volatility of the process is better described by a regime switching model and that low levels of volatility are associated with exchange rate movements close to a level of 0.80 SFR per DEM.nominal exchange rate; regime switching; random walk

Cantonal and Regional Unemployment in Switzerland: A Dynamic Macroeconomic Panel Analysis

In this paper, factors explaining the regional disparity of unemployment in Switzerland at the level of the Swiss states (cantons) and labor market regions over time are examined. We estimate a dynamic panel using particularly suited estimation techniques in order to find out to what extent existing estimation results are robust to the econometric specification. We find that particularly high tax burdens increase cantonal unemployment, the number of foreign workers is positively correlated with unemployment and human capital investment reduces unemployment.