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Made in Frankfurt? The Monetary Policy of the Swiss National Bank Since 1973

Author

Listed:
  • Alexander Rathke

    (ETH Zurich)

  • Tobias Straumann

    (University of Zurich)

Abstract

The paper investigates the monetary policy of the Swiss National Bank (SNB) in the post-Bretton Woods era, shedding light on the dynamics between the SNB and the Bundesbank and its successor, the European Central Bank, respectively. Our econometric analysis shows a high degree of synchronisation between the SNB’s interest rate changes and the decisions made in Frankfurt. The results also suggest a strong tendency toward direct exchange rate targeting before 1999, which coincides with a period of lower demand shock synchronization. This finding is supported by our analysis of the minutes of the Governing Board of the SNB for the period between 1982 and 1993. The discussions and decisions of the board show that Swiss monetary policy was largely guided by policy rate changes of the Bundesbank. The SNB routinely set the policy rate below the policy rate of the Bundesbank to enforce an implicit exchange rate target.

Suggested Citation

  • Alexander Rathke & Tobias Straumann, 2024. "Made in Frankfurt? The Monetary Policy of the Swiss National Bank Since 1973," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 66(3), pages 591-619, September.
    • Handle: RePEc:pal:compes:v:66:y:2024:i:3:d:10.1057_s41294-024-00242-0
    DOI: 10.1057/s41294-024-00242-0
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    References listed on IDEAS

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    More about this item

    Keywords

    Monetary policy; Bretton Woods; Exchange rate; Shock transmission; Policy dependence; Swiss National Bank;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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