No. 106, April

The KOF Business Situation Indicator for the Swiss private sector improved significantly in March 2017, thus consolidating the trend from the previous month (see G 6). The business situation has not been this positive for the last two years. The Swiss economy is enjoying a significant boost.

In collaboration with Schweizer Radio und Fernsehen SRF, KOF has surveyed Swiss-based research economists regarding their opinions on the new Energy Act, which will be put to the vote on 21 May. The majority of the respondents are in favour of subsidising renewable energy and reducing energy consumption. They think this should be primarily achieved via taxes as opposed to other types of intervention.

Economic science is haunted by numerous axioms we would be better off forgetting. A new book lists the key concepts you can safely ignore.

To which extend does wellbeing matter when it comes to voting? Are voters’ political decisions influenced by their own happiness? In their recent paper, “Happy Voters”, Federica Liberini, Michela Redoano and Eugenio Proto present the effect of wellbeing on voting intention and show that this indicator can be a good complement to the traditional indicators, such as financial and economic outcomes.

It is now clearer than ever that the backlash against free movement of workers and goods is a reality in many countries in the world. The UK voting for Brexit and the US pulling out of the Trans-Pacific Partnership are merely the two most striking examples of this change in attitudes towards free trade. This article discusses one possible explanation for this dramatic change: the inequality in the welfare gains from trade across different consumer groups.

US monetary policy is gradually easing up. Increasingly, there are signs that a change in monetary policy may also become possible in Europe, albeit with a significant delay. In the meantime, the Swiss National Bank (SNB) is carrying on with its two-pillar policy.