Monetary policy with forward-looking rules: The Swiss case

Nicolas Cuche-Curti

No 00.10, Working Papers from Swiss National Bank, Study Center Gerzensee

Abstract: We estimate monetary policy rules in Switzerland for 1981-1997. In addition to an inflation gap, we find that forward-looking rules with output and exchange rate gaps nicely fit monetary aggregates as well as the call rate. We split the sample in 1990 when the Swiss National Bank replaced annual targets by medium-term targets for its official policy instrument, the monetary base. We find then that our rule best describes M0 and M1 before 1990 and only the call rate after 1990. Moreover, such small open economy rules are robust with respect to diffenernt central bank information sets.

Keywords: Exchange rate; Monetary policy instrument; Output gap; Robustness; Rule; Switzerland. (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2000-09
New Economics Papers: this item is included in nep-mon
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