How to Explain the High Prices in Switzerland?
This article challenges the view that a lack of competition and a high level of regulations are the main causes of Switzerland's high prices. First, we point out a number of stylized facts which are inconsistent with this popular view. Second, we econometrically asses the "competition-regulation hypothesis" together with the well-established determinants from the real exchange rate literature in a panel of 22 OECD countries from 1970 to 2004. We find that changes in the terms of trade and the degree of openness, and to a minor extent in government expenditures and the current account, explain the movements in the Swiss real exchange rate reasonably well over the last 35 years. Changes in regulations and competition as well as in relative productivities perform poorly as explanatory variables.
Volume (Year): 145 (2009)
Issue (Month): IV (December)
|Contact details of provider:|| Postal: c/o SNB/BNS, Börsenstrasse 15, PO Box 2800, CH-8022 Zürich|
Phone: +41 (0)44 631 32 34
Fax: +41 (0)44 631 39 01
Web page: http://www.sjes.ch
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Tommaso Mancini Griffoli & Christoph Meyer & Jean-Marc Natal & Attilio Zanetti, 2014.
"Determinants of the Swiss Franc Real Exchange Rate,"
2014-08, Swiss National Bank.
- Jean-Marc Natal & Tommaso Mancini Griffoli & Christoph Meyer & Attilio Zanetti, 2015. "Determinants of the Swiss Franc Real Exchange Rate," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 151(IV), pages 299-331, December.
- Kugler, Peter & Weder di Mauro, Beatrice, 2005. "Why Are Returns on Swiss Franc Assets So Low? Rare Events May Solve the Puzzle," CEPR Discussion Papers 5181, C.E.P.R. Discussion Papers.
- Hsieh, David A., 1982. "The determination of the real exchange rate : The productivity approach," Journal of International Economics, Elsevier, vol. 12(3-4), pages 355-362, May.
- Peter Kugler & Beatrice Weder, 2004.
"International Portfolio Holdings and Swiss Franc Asset Returns,"
Swiss Journal of Economics and Statistics (SJES),
Swiss Society of Economics and Statistics (SSES), vol. 140(III), pages 301-325, September.
- Kugler, Peter & Weder di Mauro, Beatrice, 2004. "International Portfolio Holdings and Swiss Franc Asset Returns," CEPR Discussion Papers 4467, C.E.P.R. Discussion Papers.
- Peter Kugler & Beatrice Weder, 2004. "International Portfolio Holdings and Swiss Franc Asset Returns," Working papers 2004/08, Faculty of Business and Economics - University of Basel.
- De Broeck, Mark & Slok, Torsten, 2006.
"Interpreting real exchange rate movements in transition countries,"
Journal of International Economics,
Elsevier, vol. 68(2), pages 368-383, March.
- International Monetary Fund, 2001. "Interpreting Real Exchange Rate Movements in Transition Countries," IMF Working Papers 01/56, International Monetary Fund.
- Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72, pages 584.
- Sanyal, Kalyan K & Jones, Ronald W, 1982. "The Theory of Trade in Middle Products," American Economic Review, American Economic Association, vol. 72(1), pages 16-31, March.
- Anita Wölfl & Isabelle Wanner & Tomasz Koźluk & Giuseppe Nicoletti, 2009. "Ten Years of Product Market Reform in OECD Countries: Insights from a Revised PMR Indicator," OECD Economics Department Working Papers 695, OECD Publishing.
- Kohli, Ulrich, 2004. "Real GDP, real domestic income, and terms-of-trade changes," Journal of International Economics, Elsevier, vol. 62(1), pages 83-106, January.
- Kenneth Rogoff, 1996. "The Purchasing Power Parity Puzzle," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 647-668, June.
- Ulrich Kohli & Jean-Marc Natal, 2014. "The real exchange rate and the structure of aggregate production," Journal of Productivity Analysis, Springer, vol. 42(1), pages 1-13, August.
When requesting a correction, please mention this item's handle: RePEc:ses:arsjes:2009-iv-8. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Steiner)
If references are entirely missing, you can add them using this form.