Unemployment and Monetary Policy in Switzerland
Swiss Journal of Economics and Statistics / Schweizerische Zeitschrift für Volkswirtschaft und Statistik / Revue Suisse d'Economie politique et de Statistique, Volume 146, Issue 1, 2010, Pages 185-208
Keywords
Inflation targeting, NAIRU, Phillips curve
Abstract
This paper investigates the impact of the monetary policy change of the Swiss National Bank (SNB) in 1999 on the Swiss labor market on the basis of a Phillips relationship. Theoretical considerations as well as previous empirical work suggest that the SNB''s shift to a more inflation-targeted policy should have increased real-wage flexibility and lowered the NAIRU, the sacrifice ratio, and the level and persistence of inflation in Switzerland. Our results tend to confirm these expectations, although a number of the measured effects are not statistically significant.