The Resilient Trade Surplus, the Pharmaceutical Sector, and Exchange Rate Assessments in Switzerland

Philip Sauré

No WP15-11, Working Paper Series from Peterson Institute for International Economics

Abstract: With its cost- and time-intensive research and development, the pharmaceutical sector can generate large trade imbalances. These imbalances may arise because investment and output occur in different years; they are sizable if pharmaceuticals account for a large and growing share of exports. Switzerland's recent trade surplus results from this effect, which also explains why the Swiss trade surplus is exceptionally resilient. The Swiss trade surplus is, therefore, a poor indicator for exchange rate assessments.

Keywords: Trade imbalances; exchange rate elasticity; exchange rate assessment; R&D costs (search for similar items in EconPapers)
JEL-codes: F10 F14 F41 (search for similar items in EconPapers)
Date: 2015-07
New Economics Papers: this item is included in nep-ino, nep-int and nep-opm
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Citations: View citations in EconPapers (6)

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