Exchange Rates and the Swiss Economy

Author Name Willem THORBECKE (Senior Fellow, RIETI) / KATO Atsuyuki (Research Associate, RIETI)
Creation Date/NO. April 2017 17-E-064
Research Project East Asian Production Networks, Trade, Exchange Rates, and Global Imbalances
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Safe haven capital inflows, central bank policies, and other factors have produced large changes in the Swiss franc. We find that these exchange rate changes do not affect the volume of exports from Switzerland’s most advanced sectors such as pharmaceuticals and watches, but matter for exports of medium-high-technology products such as capital goods and machinery. We also report that appreciations do not affect stock prices and goods prices for the pharmaceutical and watch industries, but cause both stock and goods prices to tumble for the capital and machinery goods sectors. We conclude with policy lessons for Switzerland, for other countries facing safe haven inflows, and for the rest of the world.

Published: Thorbecke, Willem, and Atsuyuki Kato, 2018. "Exchange rates and the Swiss economy," Journal of Policy Modeling, Vol. 40(6), pp. 1182-1199