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Europe > Switzerland

You are looking at 1 - 8 of 8 items for :

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Cover IMF Working Papers
FX Intervention in the New Keynesian Model
Zineddine Alla
,
Mr. Raphael A Espinoza
, and
Mr. Atish R. Ghosh
We develop an open economy New Keynesian Model with foreign exchange intervention in the presence of a financial accelerator mechanism. We obtain closed-form solutions for the optimal interest rate policy and FX intervention under discretionary policy, in the face of shocks to risk appetite in international capital markets. The solution shows that FX intervention can help reduce the volatility of the economy and mitigate the welfare losses associated with such shocks. We also show that, when the financial accelerator is strong, the risk of multiple equilibria (self-fulfilling currency and inflation movements) is high. We determine the conditions under which indeterminacy can occur and highlight how the use of FX intervention reinforces the central bank’s credibility and limits the risk of multiple equilibria.
Keywords:
WP; risk premium; central bank; Central bank reserves; Speculative attack; Portfolio balance model; Equilibrium determinacy; Capital flows; Capital controls; Open Economy New Keynesian Model.; FX intervention; risk premium shock; open economy; terms of trade; sterilized foreign exchange intervention; working capital; Consumption; Return on investment; Exchange rates; Inflation; Global
Cover IMF Working Papers
The Macroeconomic Effects of Public Investment: Evidence from Advanced Economies
Mr. Abdul d Abiad
,
Davide Furceri
, and
Petia Topalova
This paper provides new evidence of the macroeconomic effects of public investment in advanced economies. Using public investment forecast errors to identify the causal effect of government investment in a sample of 17 OECD economies since 1985 and model simulations, the paper finds that increased public investment raises output, both in the short term and in the long term, crowds in private investment, and reduces unemployment. Several factors shape the macroeconomic effects of public investment. When there is economic slack and monetary accommodation, demand effects are stronger, and the public-debt-to-GDP ratio may actually decline. Public investment is also more effective in boosting output in countries with higher public investment efficiency and when it is financed by issuing debt.
Keywords:
WP; investment shock; public investment; investment; Fiscal policy; Growth; Debt; investment efficiency; efficiency frontier; crowding in; investment behavior well; Public investment spending; Private investment; Global
Cover IMF Working Papers
Co-Movements in Long-Term Interest Rates and the Role of PPP-Based Exchange Rate Expectations
Klaas Knot
and
Jan Marc Berk
This paper investigates international co-movement in bond yields by testing for uncovered interest parity (UIP). Existing work is supplemented by focusing on long instead of short-term interest rates and by employing exchange rate expectations derived from purchasing power parity (PPP) instead of actual outcomes. Among the major currencies during 1975-97, the paper does not find a further increase in co-movement beyond that associated with the wave of financial market liberalization in the early 1980s. Given the similarity between PPP-based UIP tests and those employing actual exchange rate outcomes, the value added of the former lies mainly with data availability.
Keywords:
WP; financial market; risk premium; monetary policy; interest parity relations; exchange rate expectations; interest rate differential; exchange rate movement; run-ups in Europe; interest rate development; cross-currency interest rate; interest rate run-up; Long term interest rates; Exchange rates; Yield curve; Interest rate parity; Return on investment; Europe; Global
Cover IMF Staff Country Reports
Slovenia: Statistical Appendix
International Monetary Fund
In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.
Keywords:
ISCR; CR; Slovenia; enterprise; enterprise sector; retail price index; Slovenia's share; profit-making company; share of debt; real value; tolar deposit; long-term debt; Slovenia's share of debt; business service; health establishment; batik of Slovenia; Consumption; Pension spending; Imports; Transportation
Cover IMF Staff Country Reports
Switzerland: Selected Background Issues
International Monetary Fund
This Selected Background Issues paper on Switzerland reviews a few monetary and exchange rate issues, including questions related to the monetary policy framework and the assessment of recent monetary conditions and exchange rate developments. The paper examines the Swiss savings and investment levels from a welfare point of view, employing for this purpose some “golden rule” criteria of capital accumulation put forward in the academic literature. It finds that, with its unusually high levels of saving, Switzerland may be one of the few advanced industrialized countries that strictly fulfills the “golden rule” criteria.
Keywords:
ISCR; CR; Switzerland; capital; asset; rate of return; investment income; background issues paper consist; export price; income credit; interest rate differential; investments assets; GDP ratio; Capital accumulation; Real interest rates; Exports; Export prices; Personal income; Global
Cover The Impact of the European Community's internal Market on the EFTA
The Impact of the European Community's internal Market on the EFTA
Occa Paper No.74
International Monetary Fund

Abstract

This paper provides an overview of the likely impact of the creation of the European Community (EC) internal market on the European Free Trade Association (EFTA) members. The focus is on the four freedoms and the institutional and legal changes required for increased economic cooperation between the EC and EFTA. Although not formally part of the negotiations, certain tax issues are also raised. The paper is in ten parts and includes a summary and glossary. The paper also discusses the institutional and legal changes that may prove necessary for greater EC-EFTA cooperation and the implications of the internal market for trade, production, and resource allocation in the EFTA countries. It examines issues related to trade in goods-mainly industrial goods-and transport services and considers issues of labor mobility and trade in financial services. Changes would also appear desirable in the areas of industrial and intellectual property rights-notably counterfeiting, trademarks, copyrights, and patents.

Keywords:
OP; EFTA country; country; EFTA member; EC country; firm; EC-EFTA cooperation; EC-EFTA relation; Transportation; Monetary unions; Value-added tax; Exchange rates; Western Europe; Europe; Southern Europe; Global
Cover IMF Working Papers
Exchange Rate Forecasting Techniques, Survey Data, and Implications for the Foreign Exchange Market
International Monetary Fund
This paper examines the dynamics of the foreign exchange market. The first half addresses a number of key questions regarding the forecasts of future exchange rates made by market participants, by means of updated estimates using survey data. Here we follow most of the theoretical and empirical literature in acting as if all market participants share the same expectation. The second half then addresses the possibility of heterogeneous expectations, particularly the distinction between “chartists” and “fundamentalists,” and the implications for trading in the foreign exchange market and for the formation of speculative bubbles.
Keywords:
WP; exchange rate; investor; rate; exchange risk premium; deutsche mark; trading room; British pound; standard deviation; market participant; Return on investment; Currency markets; Exchange rates; Depreciation; Global
Cover IMF Working Papers
The Impact of the EC's Internal Marketon Nonmember Countries: The Case of EFTA
International Monetary Fund
This paper presents an overview of the impact of the EC’s Internal Market on the EFTA countries. It starts by examining the history of EC-EFTA relations; the institutional and legal changes that closer cooperation may require; and the general implications of the Internal Market Program for EFTA countries. This is followed by an exploration of specific issues relating to the goods trade, transport services, labor mobility, financial services and capital flows. Subsequent chapters focus on the potential impact of the EC’s proposed monetary unification on EFTA countries and the implications of the EC’s efforts in the area of tax harmonization.
Keywords:
WP; EFTA country; EFTA member; EC country; EC-EFTA relation; exchange rate; EFTA firm; terms of trade; EC-EFTA cooperation; EC firm; EC standard; trading partner; Transportation; Competition; Monetary unions; Western Europe; Europe