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The Significance of Switzerland's Enormous Current-Account Surplus

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  • Peter Jarrett
  • Céline Letremy
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    Abstract

    Switzerland has had a long-standing surplus on its current account. But over the past 15 years that surplus has surged to levels unmatched by nearly any other OECD country at any point. This paper looks at the surplus from a balance of payments vantage point as well as from the optic of the excess of national saving over domestic investment. It then seeks possible explanations for the uptrend and assesses whether it results to any extent from market, institutional or policy failures that could call for reforms. A number of important measurement issues are raised. But the key recommendation is that the authorities should prepare for a possible sharp increase in the value of the Swiss franc if and when investors engaged in the “carry trade” unwind their positions. To that end they should examine labour, capital and product markets with a view to ensuring they are as flexible as possible and that factors are as mobile as possible, both geographically and sectorally. This will allow any necessary adjustment to a higher exchange rate to be smoothly accommodated. This Working Paper is largely extracted from the 2007 OECD Economic Survey of Switzerland (www.oecd.org/eco/survey/switzerland). La signification du colossal excédent des paiements courants de la Suisse La Suisse affiche depuis fort longtemps un excédent des paiements courants. Toutefois, au cours des 15 dernières années, cet excédent a atteint des niveaux quasiment sans précédent pour la zone OCDE. Dans le présent document, nous examinons cet excédent tant sous l’angle de la balance des paiements que dans l’optique de l’excédent de l’épargne nationale sur l’investissement intérieur. Nous recherchons ensuite les explications possibles de cette hausse, et tentons de déterminer si elle résulte dans quelque mesure que ce soit de défaillances des marchés, des institutions ou de l’action publique pouvant exiger la mise en oeuvre de réformes. Nous soulevons divers problèmes de mesure importants, mais notre principale recommandation est que les autorités devraient se préparer à la forte appréciation du franc suisse qui pourrait se produire dès lors que les investisseurs engagés dans des opérations de portage (« carry trade ») dénoueraient leurs positions. Dans cette optique, elles devraient examiner la situation des marchés du travail, des capitaux et des produits afin de veiller à ce qu’ils soient aussi flexibles que possible et à ce que la mobilité des facteurs de production soit maximale, tant en termes géographiques que sectoriels. Cela permettra un ajustement en douceur de l’économie en cas de hausse du taux de change. Ce Document de travail est largement extrait de l’Étude économique de l’OCDE de la Suisse 2007 (www.oecd.org/eco/etudes/suisse).

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    File URL: http://dx.doi.org/10.1787/244253177344
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    Bibliographic Info

    Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 594.

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    Date of creation: 10 Mar 2008
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    Handle: RePEc:oec:ecoaaa:594-en

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    Keywords: carry trade; balance of payments; Switzerland; current account; compte courant; Suisse; carry trade; balance des paiements;

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