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Export basket and the effects of exchange rates on exports–why Switzerland is special

Author

Listed:
  • Raphael Auer
  • Philip Saure

Abstract

Why 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.

Suggested Citation

  • Raphael Auer & Philip Saure, 2011. "Export basket and the effects of exchange rates on exports–why Switzerland is special," Globalization and Monetary Policy Institute Working Paper 77, Federal Reserve Bank of Dallas.
  • Handle: RePEc:fip:feddgw:77
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    File URL: http://www.dallasfed.org/assets/documents/institute/wpapers/2011/0077.pdf
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    References listed on IDEAS

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    1. Raphael Auer & Philip Sauré, 2012. "CHF strength and Swiss export performance -- evidence and outlook from a disaggregate analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 19(6), pages 521-531, April.
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    Cited by:

    1. THORBECKE, Willem & KATO Atsuyuki, 2014. "Export Sophistication and Exchange Rate Elasticities: The Case of Switzerland," Discussion papers 14031, Research Institute of Economy, Trade and Industry (RIETI).
    2. repec:fip:feddgm:00014 is not listed on IDEAS
    3. Matthias Flückiger & Christian Rutzer & Rolf Weder, 2016. "Die Schweizer Wirtschaft zwischen Hammer und Amboss: Eine Analyse der "Franken-Schocks" 2010/11 und 2015," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 67(03), pages 95-133, December.
    4. Willem THORBECKE & KATO Atsuyuki, 2017. "Exchange Rates and the Swiss Economy," Discussion papers 17064, Research Institute of Economy, Trade and Industry (RIETI).

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    Keywords

    International trade ; International economic relations;

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