Japans Lehren für das Schweizer Wechselkursdilemma

Gunther Schnabl

Wirtschaftsdienst, 2015, vol. 95, issue 3, 192-199

Abstract: In January 2015, the Swiss National Bank announced that the hard peg of the Swiss franc against the euro will be released and that the Swiss currency should float freely. This announcement brought the Swiss franc under strong appreciation pressure. The Swiss National Bank seems to have returned within a short time to a tight peg without officially announced parity. This paper shows that currencies of countries with persistent current account surpluses and high foreign currency denominated debt, such as the Swiss franc and the Japanese yen, are under a persistent appreciation pressure. Appreciation expectations, which are triggered by official announcements of appreciations, lead into runs in the domestic currency, which make appreciation expectations self fulfilling. Multiple equilibria emerge: the appreciation of the domestic currency and the appreciation induced crisis depend on the signals of the central bank concerning its tolerance of an appreciation of the domestic currency. The phenomenon is enhanced in an environment of very expansionary monetary policies in the centres of the world monetary system. The economic policy implication is a tight peg of the Swiss franc to the euro, because a better solution is not available. Copyright ZBW and Springer-Verlag Berlin Heidelberg 2015

Keywords: F15; F31; F33 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1007/s10273-015-1805-z (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Japans Lehren für das Schweizer Wechselkursdilemma (2015)
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: https://EconPapers.repec.org/RePEc:spr:wirtsc:v:95:y:2015:i:3:p:192-199

Ordering information: This journal article can be ordered from
http://www.springer. ... policy/journal/10273

DOI: 10.1007/s10273-015-1805-z

Access Statistics for this article

Wirtschaftsdienst is currently edited by Christian Breuer

More articles in Wirtschaftsdienst from Springer, ZBW - Leibniz Information Centre for Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().