Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/259727 
Year of Publication: 
2019
Citation: 
[Journal:] Swiss Journal of Economics and Statistics [ISSN:] 2235-6282 [Volume:] 155 [Issue:] 7 [Publisher:] Springer [Place:] Heidelberg [Year:] 2019 [Pages:] 1-23
Publisher: 
Springer, Heidelberg
Abstract: 
I assess the stability of the monetary environment in Switzerland over the past two centuries. In order to control for transitory measurement errors, in particular in nineteenth century data, I use an unobserved-components stochastic-volatility model to extract the permanent trends from several nominal variables. The descriptive analysis of these trends suggests that the current monetary regime, flexible inflation targeting, provided a relatively stable monetary environment. Although the trends are quite stable for the nineteenth century, the estimates are imprecise. We should therefore be cautious when characterizing metal currency regimes as providing a stable monetary environment. A discussion of the results shows that the apparent success of flexible inflation targeting poses new challenges for the implementation of monetary policy because the trend decline in inflation was associated with a trend decline in nominal interest rates.
Subjects: 
Nominal stability
Price stability
Monetary regimes
Monetary history
Measurement error
Unobserved-components stochastic-volatility model
JEL: 
E31
N1
C22
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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