Willem Thorbecke, Atsuyuki Kato, 01 July 2017

Since 2007, there have been large changes in the Swiss franc. This column shows that exchange-rate appreciations do not affect the exports, profits, or stock returns of Swiss companies making sophisticated products. In contrast, rises in the franc decrease the exports, profits and stock returns of firms producing medium-high-technology goods. An economy’s production structure is important for weathering exchange-rate fluctuations.

Barthélémy Bonadio, Andreas Fischer, Philip Sauré, 21 April 2016

According to standard estimates, exchange rate shocks affect import prices only slowly. This column presents evidence that challenges this view. Focusing on the large, unanticipated change in the Swiss franc in 2015, it shows that a change in import prices materialised very quickly. Prices started to move on the second working day after the exchange rate shock, and the medium-run pass-through of roughly 50% was reached after six additional working days.

Stefan Gerlach, Peter Kugler, 01 March 2016

The Swiss franc was created in 1850, but the Swiss National Bank wasn’t founded until 1907. The interim was a period of free banking, marked by two successive phases: one of free, unregulated note issue; and then one of strictly limited banking freedom. This column studies the Swiss banking market over this time. The number of banks is found to play an important role in determining the long-run money demand, and in the monetary adjustment process. Further, problems with harmonisation and common regulation created the incentives for monopolisation and centralisation.

Charles Wyplosz, 19 January 2015

Ending the Swiss franc-euro peg created market turmoil and much vitriol among pundits. This column argues the that SNB could and should have waited – riding along with the euro’s depreciation until Swiss deflation disappeared, but the decision to end the one-sided peg was not a mistake. The peg was always meant as a temporary measure that had to be lifted one day.

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