No. 167, November

The KOF Business Situation Indicator for the Swiss private sector fell significantly in October (see chart G 8). Although business remains predominantly encouraging according to the KOF Business Tendency Surveys, the last time the indicator was lower than it is at present was in June 2021.

Much higher energy prices and the threat of recession abroad are depressing sentiment in the tourism industry. However, KOF expects to see growth in overnight stays thanks to the ongoing recovery from the pandemic and the strength of domestic tourism.

Politicians often act in a biased manner when allocating public funds. To date, however, it has only been possible to quantify strategic political bias on average. A recent analysis of government disaster relief allocation in response to hurricanes in the United States now shows that the extent of political favouritism varies greatly according to the decision-making situation. The issue is most pronounced for medium intensity storm events.

In her working paper entitled ‘Power Shifts, Emigration, and Population Sorting’ co-authored with political scientist Michaël Aklin, KOF economist Vera Eichenauer analyses the shift in power relations by using the example of the Swiss canton of Jura. In this interview she explains her key findings.