Editions

Alexis Perakis, monetary policy expert at KOF, talks in this interview about his predictions for inflation, interest rates and the Swiss franc exchange rate this year. He considers the current debate about interest-rate cuts to be premature.

Switzerland’s population is ageing. This article attempts to qualitatively assess the impact that this trend has on inflation. Its immediate effects are likely to be moderate. At the same time, there are risks: inflation could turn out to be higher but, surprisingly, it could also be lower.

New survey data provide insights into the price-setting behaviour of Swiss companies. They shed light on price setters’ motives when they are reviewing, forming and adjusting their prices, as well as the reasons why they do not adjust their prices. In particular, they illustrate how prices are set so as to take account of the competing interests between customers and competitors.

KOF expects interest rates to continue to rise this year in the euro area, the United States and Switzerland. It predicts that inflation will eventually fall but will remain high. The two economists Alexander Rathke and Pascal Seiler explain why in an interview.

Inflation in Switzerland, the euro area and the US is at historic extremes; the upward trend in prices is gaining breadth.

Prices in the euro area and especially in the United States have risen sharply recently. Inflation momentum has also picked up in Switzerland. However, KOF expects the upward trend in prices in Switzerland to weaken towards the end of the year.

Russia’s invasion of Ukraine has lowered Swiss companies’ expected wage growth and, at the same time, raised their inflation forecasts. Small and medium-sized enterprises in particular, as well as companies in the manufacturing sector, expect to see higher prices in the long run. In purely arithmetical terms, the information provided by these firms translates into negative real wage forecasts, which are even more negative than they were before the war in Ukraine.

The continuing rise in prices is forcing the central banks in the United States and Europe to reconsider their highly expansionary monetary policies. The Swiss National Bank will probably only reverse its policy stance once central bankers in the euro area have implemented their first interest-rate hike.

Directly paid healthcare costs in Switzerland decrease as a share of income as income increases, whereas in other countries it is typically the other way round. This is due not to rising healthcare costs but to the way healthcare expenditure is funded.

KOF Director Jan-Egbert Sturm talks in an interview about the latest price increases in almost all currency areas, central banks’ potential counter-strategies and why inflation in Switzerland remains moderate.

Inflation rates have risen significantly over the past year. In the United States in particular, inflation is increasingly becoming a problem to which the Federal Reserve (Fed) must respond. Inflation has also risen sharply in the euro area. In Switzerland, the situation is still somewhat less serious.

KOF economist Alexander Rathke talks about rising prices in the United States and Europe, the special case of Switzerland and the challenges of monetary policy over the coming years.

Prices have risen recently in both the United States and Europe. But much of this price increase can be explained by the COVID-19 pandemic and is therefore likely to be only temporary.

Recently there have been increasing warnings of a resurgence of inflation. This paper presents the results of an empirical study of the main factors that have affected inflation over the past two decades.