Asymmetric Effects of Monetary Policy in Switzerland

This study examines whether positive and negative money-supply shocks have asymmetric effects on output. The empirical evidence for Switzerland is in general consistent with the findings for other countries: negative shocks affect output more strongly in absolute terms than positive shocks. However, the results depend on the assumptions about the money-supply process, in particular with respect to the inclusion of variables representing foreign trade. The results therefore suggest that the degree of asymmetric effects of monetary policy on output depends on the openness of the economy.