Working Paper: CEPR ID: DP8547
Authors: Stefan Gerlach; Thomas J. Jordan
Abstract: This paper reviews the tactics and strategy of monetary policy in Switzerland, using a selection of Benjamin Friedman?s papers to organize the discussion, and starting in the early 1970s, when his academic papers started to appear in scholarly journals. The review focuses on the SNB?s experience with monetary targets in 1975-1999, the policy strategy adopted by the SNB in 2000, and the SNB?s experiences during the financial crisis that started in August 2007. On many occasions, Benjamin Friedman?s and the SNB?s thinking converge, while on others, they diverge.
Keywords: financial crisis; inflation targeting; monetary policy; monetary targeting; Swiss National Bank
JEL Codes: E43; E53; E58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| SNB's adoption of monetary targeting in the 1970s (E52) | reduction in inflation rates (E31) |
| SNB's monetary targeting strategy (E52) | decrease in inflation to about 1% by 1976 (E31) |
| SNB's policy decisions (E52) | sharp appreciation of the Swiss franc (F31) |
| SNB's shift to a more flexible monetary targeting approach in the 1990s (E52) | stabilization of inflation rates (E63) |
| SNB's proactive liquidity provision measures during financial crisis starting in 2007 (F65) | prevention of deflation (E31) |
| monetary policy decisions (E52) | tangible effects on inflation and economic stability (E31) |