Swiss Monetary Policy, 2000-2009

Hans Genberg and Stefan Gerlach ()

No 7805, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In January 2000 the Swiss National Bank adopted a new monetary policy framework incorporating a price stability objective defined as (any rate of) CPI inflation below 2 percent. We contrast this framework with inflation targeting strategies and review the SNB?s policy decisions since its introduction. Empirical results indicate that in setting policy the SNB reacts in much the same way as inflation targeting central banks. The recent sharp reduction in the policy rate is consistent with the estimated reaction function until the second quarter of 2009 when the zero bound became binding, while the deterioration of economic conditions still called for further monetary easing. This may explain the unconventional monetary policy measures adopted since then.

Keywords: Empirical reaction functions; Inflation targeting; Snb; Taylor rule (search for similar items in EconPapers)
JEL-codes: E43 E52 E58 (search for similar items in EconPapers)
Date: 2010-05
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Citations: View citations in EconPapers (3)

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