" Switzerland is the growth laggard in the industrial world " - this dismal view has become part and parcel of today's conventional wisdom in Switzerland and elsewhere. We show it to be but partially true : accurate when judged by the trend growth rate of officially recorded real GDPs in 1970-2003, but not when considering what we call "adjusted real gross national incomes" ; i.e. a better measure of the populations' material wellbeing than real GDPs, although less correlated with employment and unemployment. The adjustment has to do with how to deflate the balance of goods and services as well as the balance of factor income. More important, and perhaps novel, is that there appears to be no statistically significant difference between the estimated trend growth rate of Switzerland's corrected gross national income and that of most other European countries : almost all tend to grow at a rate of about 2% p.a. There is however a significant long-term growth differential between these European countries, including Switzerland, and overseas ones such as Australia, Canada and the USA. This is because most of Europe suffers from well-known and weighty structural problems, not necessarily the same everywhere, but which should be addressed urgently and efficiently everywhere. The paper also includes a "parable" on the economic impact of oil price shocks, which may be useful for didactical purposes.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.