The Persistence of Inflation in Switzerland: Evidence from Disaggregate Data

Simone Elmer () and Thomas Maag ()
Additional contact information
Simone Elmer: KOF Swiss Economic Institute, ETH Zurich, Switzerland, http://www.kof.ethz.ch

No 09-235, KOF Working papers from KOF Swiss Economic Institute, ETH Zurich

Abstract: This paper investigates persistence of Swiss consumer price inflation using aggregate and disaggregate inflation data covering 1983{2008. We document that persistence of sectoral inflation rates is below persistence of aggregate inflation. Our main finding is that inflation persistence significantly declines in the early 1990s. An estimated factor model reveals that inflation persistence stems from a persistent component that is common to inflation rates across sectors. Both the relevance and the persistence of the common component decline in the 1990s. Depending on the sample period and aggregation level, 70 to 90 percent of the variance in sectoral inflation rates is accounted for by short-lived sectoral factors.

Keywords: inflation persistence; inflation dynamics; relative price variability; factor model (search for similar items in EconPapers)
JEL-codes: E31 E52 C22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
Date: 2009-07
View list of references

Downloads: (external link)
http://www.kof.ethz.ch/publications/science/pdf/wp_235.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:kof:wpskof:09-235

Access Statistics for this paper

More papers in KOF Working papers from KOF Swiss Economic Institute, ETH Zurich
Contact information at EDIRC.
Series data maintained by ().