The Swiss Disease: Facts and Artefacts, A Reply to Kehoe and Prescott
Michael Graff (),
Christian Müller and
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Yngve Abrahamsen: Swiss Federal Institute of Technology-Zurich
Roland Aeppli: Swiss Federal Institute of Technology-Zurich
Bernd Ships: Swiss Federal Institute of Technology-Zurich
Review of Economic Dynamics, 2005, vol. 8, issue 3, pages 749-758
This paper investigates the claim made by Kehoe and Prescott (2002) that Switzerland and New Zealand experienced 'great depressions' in the last two decades. We question the appropriateness of the measure used by Kehoe and Prescott (GDP per working-age person) and propose a more accurate measure to compare economic performance on a consistent basis, namely, GDP per hour worked which is also adjusted for terms of trade changes and investment in tangibles. Based on this yardstick, the difference in economic performance between the US and Switzerland turns out to be largely a statistical artefact and Kehoe and Prescott's conditions for a 'great depression.' (Copyright: Elsevier)
Keywords: Great depressions; Switzerland; labour productivity; national accounting standards; terms of trade adjustment; GDP per hours worked (search for similar items in EconPapers)
JEL-codes: O40 O47 O57 (search for similar items in EconPapers)
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Persistent link: http://EconPapers.repec.org/RePEc:red:issued:v:8:y:2005:i:3:p:749-758
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