Unemployment and monetary policy in Switzerland

Author:

Kugler Peter,Sheldon George

Abstract

Summary This paper investigates the impact of the monetary policy change of the Swiss National Bank (SNB) in 1999 on the Swiss labor market on the basis of a Phillips relationship. Theoretical considerations as well as previous empirical work suggest that the SNB’s shift to a more inflation-targeted policy should have increased real-wage flexibility and lowered the NAIRU, the sacrifice ratio, and the level and persistence of inflation in Switzerland. Our results tend to confirm these expectations, although a number of the measured effects are not statistically significant.

Publisher

Springer Science and Business Media LLC

Subject

Economics and Econometrics,Statistics and Probability

Reference39 articles.

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3. Ball, L. and N. Sheridan (2005), “Does Inflation Targeting Make a Difference?”, in: M. Woodford and B. Bernanke (eds), Inflation Targeting, Chicago: University of Chicago Press, pp. 249–76.

4. Benati, L. (2003), “Evolving Post-World War II U.K. Economic Performance”, Journal of Money, Credit, and Banking, 36(4).

5. Bernanke, B., T. Laubach, F. Mishkin, and A. Posen (1999), Inflation Targeting: Lessons from the International Experience, Princeton, NJ: Princeton University Press.

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