The historical origins of the safe haven status of the Swiss franc

Baltensperger, Ernst; Kugler, Peter (2016). The historical origins of the safe haven status of the Swiss franc. Aussenwirtschaft - Schweizerische Zeitschrift für internationale Wirtschaftsbeziehungen / The Swiss review of international economic relations, 67(2), pp. 1-27. Rüegger

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An empirical analysis of international interest rates and of the behavior of the exchange rate of the Swiss franc since 1850 leads to the conclusion that World War I marks the origin of the strong currency and safe haven status of the Swiss franc. Before World War I, interest rates point to a weakness of the Swiss currency against the pound, the guilder and French franc (from 1881 to 1913) that is shared with the German mark. Thereafter, we see the pattern of the Swiss interest rate island develop and become especially pronounced during the Bretton Woods years. Deviations from metallic parities confirm these findings. For the period after World War I, we establish a strong and stable real and nominal trend appreciation against the pound and the dollar that reflects, to a sizeable extent, inflation differentials.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics
03 Faculty of Business, Economics and Social Sciences > Other Institutions > Emeriti, Faculty of Business, Economics and Social Sciences

UniBE Contributor:

Baltensperger, Ernst and Kugler, Peter

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

0004-8216

Publisher:

Rüegger

Language:

English

Submitter:

Eva Marina Zuberbühler

Date Deposited:

08 Jun 2017 15:53

Last Modified:

08 Jun 2017 15:53

Additional Information:

JEL codes: N23

Uncontrolled Keywords:

Swiss franc, safe haven, Swiss interest island, deviation from metallic parity, real and nominal appreciation

BORIS DOI:

10.7892/boris.93160

URI:

https://boris.unibe.ch/id/eprint/93160

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