Are there Shifts in the Output-Inflation Trade-off? The Case of Switzerland

This paper analyzes the change of the output-inflation trade-off in Switzerland over time. Three approaches are used. A traditional equation and a structural vectorautoregressive model are estimated with a moving local regression method. Furthermore, a dummy variable method is applied. The findings are robust among the different approaches. The short-run output inflation trade-off worsens in the 1970s and the 1980s compared to the Bretton Woods period. Output stabilization today is more costly in terms of inflation than it used to be earlier.