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The Swiss Business Cycle and the Lead of Small Neighbor Liechtenstein

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  • Andreas Brunhart

    (Liechtenstein-Institut)

Abstract

Der vorliegende Beitrag untersucht den schweizerischen Konjunkturzyklus vergleichend mit den fünf angrenzenden Staaten Deutschland, Österreich, Italien, Frankreich und Liechtenstein. In Kontrast zu der weitverbreiteten Auffassung, dass kleine Staaten ihren Konjunkturzyklus von Grossstaaten „importieren“, kann gezeigt werden, dass das reale BIP des Klein(st)staates Liechtenstein einen Vorlaufindikator für die Volkswirtschaft der Schweiz darstellt, sowohl was die Wachstumsraten als auch die Trendabweichung (Produktionslücke) betrifft. Diese Schlussfolgerung, auf Jahresdaten für 1972 bis 2013 gestützt, beruht auf Kreuzkorrelationsanalysen sowie univariaten und multivariaten Granger-Kausalitätstests. Der statistisch signifikante Vorlauf von einem Jahr ist robust für alle verwendeten Länder-Samples, Zeitfenster der vorliegenden Jahresbeobachtungen und Modellspezifikationen. Dieses Ergebnis deutet die Möglichkeit an, dass Mikrostaaten nicht nur ausländischen Schocks stärker ausgesetzt sind, empfindlicher auf internationale Fluktuationen reagieren und volatiler als Grossstaaten sind – alles stilisierte Fakten der Literatur der Kleinstaaten-Ökonomie –, sondern dass deren Konjunkturzyklen auch früher betroffen sind. This contribution investigates the business cycles of Switzerland compared to its five neighboring countries Germany, Austria, Italy, France and Liechtenstein. In contrast to the widespread notion of small countries “importing” the business cycle from bigger neighbors, it is shown that the real GDP of the very small neighboring country Liechtenstein is a leading indicator for Switzerland’s economy, regarding the growth rates as well as the output gap. This finding is based on cross correlation analyses and univariate and multivariate Granger causality tests, applying annual data from 1972 until 2013. The significant lead of one year is robust across all the various countrysamples, time frames and model specifications. This conclusion indicates the possibility that small nations are not only more opposed to foreign shocks, react more sensitively to international economic fluctuations, and are more volatile than big nations – all stylized facts from small state economics literature –, but that their business cycles are also affected earlier.

Suggested Citation

  • Andreas Brunhart, 2015. "The Swiss Business Cycle and the Lead of Small Neighbor Liechtenstein," Arbeitspapiere 51, Liechtenstein-Institut.
    • Handle: RePEc:lii:wpaper:51
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    More about this item

    Keywords

    Konjunkturzyklus; Vorlaufindikatoren; Schweiz; Liechtenstein; VAR; Granger-Kausalität;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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