Export basket and the effects of exchange rates on exports–why Switzerland is special
AbstractWhy has Swiss export performance been so strong during the past quarters despite the strong appreciation of the CHF? In this paper, we use historical data on exchange rates and trade at the sectoral level to document that a contributing factor behind the limited impact of the exchange rate is the unique composition of Swiss exports. In particular, we document that the Swiss export basket is heavily concentrated in price-insensitive goods such as machinery or pharmaceuticals, where prices and thus the exchange rate have relatively little importance for demand. This makes the aggregate volume of Swiss exports less responsive to exchange rate changes than exports of other OECD nations.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Dallas in its series Globalization and Monetary Policy Institute Working Paper with number 77.
Date of creation: 2011
Date of revision:
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- Raphael Auer & Philip Sauré, 2011.
"CHF Strength and Swiss Export Performance – Evidence and Outlook From a Disaggregate Analysis,"
11.03, Swiss National Bank, Study Center Gerzensee.
- Raphael Auer & Philip Sauré, 2012. "CHF strength and Swiss export performance -- evidence and outlook from a disaggregate analysis," Applied Economics Letters, Taylor and Francis Journals, vol. 19(6), pages 521-531, April.
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