edoc

Exchange rate and foreign GDP elasticities of Swiss exports across sectors and destination countries

Hanslin Grossmann, Sandra and Lein, Sarah M. and Schmidt, Caroline. (2016) Exchange rate and foreign GDP elasticities of Swiss exports across sectors and destination countries. Applied Economics, 48 (57). pp. 5546-5562.

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Abstract

This article uses a detailed breakdown of Swiss trade flows to identify how the impact of the two main determinants of Switzerland’s exports – foreign demand and the real exchange rate – varies across sectors and export destinations. Our main findings are that (i) both foreign demand and exchange rate elasticities vary substantially across both export sectors and export destinations. (ii) Foreign demand trends are more important for structural considerations than the exchange rate. This is due to the fact that exports of the two largest export sectors are relatively sensitive to long-run foreign demand developments while they are relatively insensitive to changes in the exchange rate. (iii) The sectoral structure of Switzerland’s exports has shifted towards goods that have a lower short-run demand elasticity and a higher long-run demand elasticity. Goods exports are thus less influenced by business cycle fluctuations while they benefit more from long-term growth trends. (iv) The export share of sectors with a relatively low exchange rate elasticity has increased. However, this result is mainly driven by the strong rise in exports of chemicals and pharmaceuticals as well as precision instruments and watches, which are also the two important sectors responsible for the Swiss trade surplus.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Makroökonomie (Lein)
UniBasel Contributors:Lein, Sarah M.
Item Type:Article, refereed
Article Subtype:Research Article
Publisher:Routledge, Taylor and Francis
ISSN:0003-6846
e-ISSN:1466-4283
Note:Publication type according to Uni Basel Research Database: Journal article
Language:English
Identification Number:
Last Modified:28 Apr 2018 14:40
Deposited On:25 Jan 2018 17:05

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