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Taux négatifs: made for Switzerland

Author

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  • Jean-Pierre Danthine

    (CEPR - Center for Economic Policy Research - CEPR, PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

Abstract

As a small open economy with a safe-haven currency, Switzerland needs to have a negative interest rate differential with the euro area. An appropriate differential over the long term is the only way to discourage overvaluation of the Swiss franc. Given the prospect of secular stagnation and persistently low rates, a reassessment of the importance and value of negative interest rates to the Swiss economy is crucial. In order to restore an interest rate differential close to its historical average, the Swiss National Bank should be permitted to charge a fee on unusual cash withdrawals and also be able to impose much lower rates than today.

Suggested Citation

  • Jean-Pierre Danthine, 2017. "Taux négatifs: made for Switzerland," Post-Print hal-01884328, HAL.
  • Handle: RePEc:hal:journl:hal-01884328
    Note: View the original document on HAL open archive server: https://hal-pjse.archives-ouvertes.fr/hal-01884328
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    References listed on IDEAS

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    1. 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.
    2. Venky Venkateswaran & Laura Veldkamp & Julian Kozlowski, 2015. "The Tail that Wags the Economy: Belief-Driven Business Cycles and Persistent Stagnation," 2015 Meeting Papers 800, Society for Economic Dynamics.
    3. Juan Carlos Suárez Serrato & Philippe Wingender, 2016. "Estimating Local Fiscal Multipliers," NBER Working Papers 22425, National Bureau of Economic Research, Inc.
    4. Kugler, Peter & Weder, Beatrice, 2005. "Why are Returns on Swiss Franc Asset so Low?," Working papers 2005/08, Faculty of Business and Economics - University of Basel.
    5. Lawrence Christiano & Martin Eichenbaum & Sergio Rebelo, 2011. "When Is the Government Spending Multiplier Large?," Journal of Political Economy, University of Chicago Press, vol. 119(1), pages 78-121.
    6. Kenneth S. Rogoff, 2016. "The Curse of Cash," Economics Books, Princeton University Press, edition 1, number 10798.
    7. 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.
    8. 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.
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