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How to Explain the High Prices in Switzerland?

Sax, Christoph and Weder, Rolf. (2009) How to Explain the High Prices in Switzerland? Schweizerische Zeitschrift für Volkswirtschaft und Statistik, 145 , H. 4. pp. 463-483.

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Official URL: http://edoc.unibas.ch/dok/A5257258

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Abstract

This article challenges the view that a lack of competition and a high levelof regulations are the main causes of Switzerland’s high prices. First, wepoint out a number of stylized facts which are inconsistent with this popularview. Second, we econometrically asses the “competition-regulationhypothesis” together with the well-established determinants from the realexchange rate literature in a panel of 22 OECD countries from 1970 to2004. We find that changes in the terms of trade and the degree of openness,and to a minor extent in government expenditures and the currentaccount, explain the movements in the Swiss real exchange rate reasonablywell over the last 35 years. Changes in regulations and competition aswell as in relative productivities perform poorly as explanatory variables.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Aussenwirtschaft und Europ. Integration (Weder)
UniBasel Contributors:Weder, Rolf and Sax, Christoph
Item Type:Article, refereed
Article Subtype:Research Article
Bibsysno:Link to catalogue
Publisher:Helbing und Lichtenhahn
ISSN:0303-9692
Note:Publication type according to Uni Basel Research Database: Journal article
Last Modified:22 Mar 2012 14:28
Deposited On:22 Mar 2012 14:01

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