No. 117, April

In March 2018, the KOF Business Situation Indicator for the Swiss private economy improved once again (see G 8). The indicator has been on a steady upward trajectory since the beginning of the year and has now reached the highest point since summer 2011. The Swiss economy is running smoothly.

The global economy is in excellent condition, with global trade expanding at an above-average rate for the first time in five years. However, KOF anticipates a slight decline in global dynamics in the coming months.

The Swiss economy is booming. KOF expects a comparatively high GDP growth rate of 2.5% this year and a relatively favourable economic trend in 2019 (1.8%). There is good news from the employment market, which should record a slight decline in the unemployment rate. Inflation will slowly move into the positive range.

As research has shown that good Vocational Education and Training (VET) systems lead to better results, and there is already a good understanding of what a good VET system is, it is important to know what it takes to improve a system. KOF's Education Systems Research Division has just finished the first version of a literature review on the implementation of VET reforms.

The current step-by-step introduction of paid sick leave in the USA is accompanied by a significant decline in the influenza rate. This article illustrates the correlation between paid sick leave and contagion, and suggests that sick pay schemes can be used to avoid contagion.

The high volatility of certain revenue categories confronted the Canton of Neuchâtel with budgetary policy problems in past years. Unexpected and sometimes significant changes made it difficult to conduct budgetary policy. In particular, unexpected revenue shortfall made it necessary to make adjustments to ensure compliance with the requirements of the debt brake. Therefore, the KOF recommends the implementation of a smoothing mechanism along with a budgetary rule based on the trend revenue.