The Swiss disease: Facts and artefacts.

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We briefly discuss Kehoe/Prescott's definition of a "great depression". Thereafter, we analyse the underlying data -time series of labour productivity for the countries under consideration -and perform sensitivity tests with respect to alternative operationalisations for Switzerland and the U.S. It is shown that with different (and arguably more appropriate) time series the impressive growth gap between the well performing U.S. and poor-performing Switzerland reduces considerably. Yet, this still does not explain the comparatively poor economic growth in Switzerland during the last decades, which is noted by many observers. Accordingly, we analyse economic performance within the comparative cross-country framework, which is now standard in the new empirical literature on the determinants of economic growth. Based on a balanced panel data set on a large sample of countries with multiple observations through time, the growth rate of labour productivity is regressed on its presumed determinants, which follow from an extended version of the neo-classical aggregate production function. This analysis departs from the standard approach by focussing on the country-specific fixed effects rather than the structural growth parameters. The results show that there is no significant deviation of Switzerland's performance from its predicted value after taking account of the explicit determinants of economic growth. Terms of use: Documents in

Driving forces of the Swiss output gap

“…It was not until after the occurrence of the Mexican crisis and the following worldwide economic downturn that the SNB lowered interest rates, an action that was also due to the strong domestic currency and the stagnation of the domestic economy (Hildebrand, 2004). The negative values of the DSGE output gap correspond well with conventional wisdom that Switzerland faced stagnation, or at least weak growth, during the 1990s although there is some disagreement about the scale of this slowdown (Lambelet and Mihailov (1999), Kehoe and Ruhl (2005) and Abrahamsen et al (2005)). However, this weak performance by the Swiss economy is captured only by DSGE output gap and detrended output; it is not captured by the HP-cycle.…”

Has Switzerland Really Been Marked by Low Productivity Growth? Hours Worked and Labor Productivity in Switzerland in a Long‐run Perspective

“…In the third column, hours worked data from GGDC are used. This is the only publicly available hours worked series for Switzerland prior to 1970 and thus is widely employed in empirical work (among others, in Abrahamsen et al, 2005a;Rogerson, 2006). The labor input series in the third column stems from Christoffel (1995).…”

“…For example, it contrasts with the high quality of Swiss exports (Credit Suisse Economic Research, ; Hallak and Schott, ), the very good reputation of Switzerland's educational system, the economy's high expenditure for R&D, and the fact that Switzerland is generally ranked among the most innovative and most competitive countries worldwide (Arvanitis and Hollenstein, ; IMD, ). Several economists have thus searched for simpler explanations for the “Swiss productivity puzzle”—notably by questioning the available data (Kohli, ; Abrahamsen et al ., 2005a, 2005b; Hartwig, , ).…”

Recent great depressions: Aggregate growth in New Zealand and Switzerland, 1973–2000

“…To start with, Abrahamsen et al (2003) ignore Swiss data for the period before 1980 presumably because they feel that these data are so bad that they have to be discarded completely. 7 Notice that, in Figure 6, the period 1973-1980 was the period of the sharpest drop in GDP per working-age person in Switzerland.…”

“…Because their definition of depression would rule out periods in which drops in output are driven by massive increases in unemployment, it would probably be best for them to use another term. Abrahamsen et al (2003) also look for evidence of depressions using a measure much more closely related to ours. They choose to run a regression with cross-country fixed effects to study the determinants of New Zealand's and Switzerland's growth.…”