Date Topic Overview
  2021-05-14 Quantification Forecast update. Switzerland's way out of Corona-induced recession continues with the latest reading of the «KOF Surprise Indicator» steadying at -0.056. Despite a slight drop from -0.047 estimated GDP growth amounts to -0.57 percent year-on-year in 2021, 1st quarter. Details»

Forecast update. The Corona pandemic devastated Swiss GDP in 2020 yet the annual result looks quite bearable at -2.5 percent over the whole year, the «KOF Surprise Indicator» implies. The indicator improves slightly to -0.046 (up from -0.048 in 2020q3) suggesting a much year-on-year growth of about -0.5 percent in Q4, 2020. Details»

  2021-01-20 Financial markets Presentation. Asset prices are ruled by individuals not probability laws. Watch and listen to the evidence for non-ergodicity of trader samples. Details»

Forecast update. Swiss GDP bounces back very strongly in the 3rd quarter, the «KOF Surprise Indicator» tells. Owed to the significant slowdown in Covid spreading the indicator recovers to -0.049 (up from -0.13 in 2020q2) implying a much better year-on-year growth of about -3.8 percent in Q3, 2020. Details»

  2020-10-01 Financial markets Comment. Modern macro models suffer from an inherent contradiction: agents optimize over an infinite horizon while readers are made to believe that model updates are coming soon, sooner than infinity. Gabaix (AER, 2020) is a point in case. Details»
Fiscal policy

How to fix the «missing elite» problem in east Germany? Genuine east German elites are missing at large. Top positions in east and west Germany are overwhelmingly occupied by west Germans with devastating effects on the east German society threatening democracy. Though a simple, well-established solution exists (in German) Details»

  2020-08-20 Quantification Forecast update. In contrast to early expectations and to its neighbours Switzerland seems to sail rather comfortably through the corona crisis, the latest reading of the «KOF Surprise Indicator» suggests. GDP growth still takes a hit to the tune of -5.1 percent year-on-year in 2020, 2nd quarter. Details»
Fiscal policy

What shall we do with the «Corona» deficit?. A negative poll tax is part of the answer! (in German) Details»

  2020-05-14 Quantification Forecast update. Just before COVID-19 hit the «KOF Surprise Indicator» slips again to -0.04 (2019 Q4: -0.02) logging moderate 0.8 percent growth year-on-year in the first quarter, 2020. The new estimate benefits from the usual upward revision of SECO guesses in SECO's March release. Details»
Asset PricesCI

What is money (hoisted from the archive). Whether it is money decides the receiver who has to trust that the money (s)he accepts will buy him / her at least as much utility as (s)he gives up in exchange for money. Consequently, money is equivalent to the trust in those institutions that guarantee the future exchange without loss. This (new) money defintion better suites reality than common functionality based ones. (in German). Details»

  2015-01-28 Fiscal policy
Note on the SNB's lift of the fx floor (hoisted from the archive). The SNB lifted the floor on the Swiss Franc - Euro rate earlier this (2015) year. This move yields several lessons with respect to the future conduct of monetary policy. Most importantly of all, the SNB's word will not regain the weight it used to have (in German). Details»
Fiscal policy200

Fighting Corona. The famed Swiss debt brake knows a lesser known amendmend that may turn the Swiss Government's fiscal anti crisis bazooka against the Swiss economy. It is not difficult to attend to this threat but it requires some bold moves by the government and parliament. Details»

  2020-03-26 Fiscal policy
Federal budget in Switzerland. Public opinion in Switzerland has it that repeated surpluses in the Federal budget are the results of considerate and modest budgeting in line with the famed Swiss debt brake. The truth is more prosaic. The lion's share of surpluses is owed to systematic business cycle forecasting errors. (in German). Details»

Forecast update. Swiss GDP gains 0.8 percent in 2019 the «KOF Surprise Indicator» tells. Its latest reading of -0.02 (up from -0.05 in 2019q4) shows that growth picks up slightly to about 1.4 percent year-on-year in the last quarter of 2019. Details»

  2019-12-05 Fiscal policy
Fighting causes of migration. If you think you have o fight migration in spite of its economic benefits addressing the root causes of migration might be the way to go. However, German unification tells you that even under ideal circumstances this fight might be a lost cause (pp. 7-11, in German). Details»

Forecast update. The «KOF Surprise Indicator» again tests recession territory at -0.05 (2019 Q2: -0.03) after its brief recovery in summer. This latest reading indicates that annual growth remains weak at about 1.2 percent year-on-year expansion in the third quarter of 2019. Details»

  2019-08-22 Fiscal policy
Swiss federal tax revenues. Following the introduction of the Swiss debt brake federal tax revenues established a habit of exceeding expectations. Mounting surpluses deny parliament its right to budget and question the legitiimacy of the debt brake rule. Mediocre GDP forecasts are partly to blame and fixes are well feasible (in German). Details»

Forecast update. Weak growth of Swiss value added continues despite a slight uptick of the «KOF Surprise Indicator» to -0.03 (2019 Q1: -0.05). This latest reading indicates that annual growth remains below the one-percen mark year-on-year expansion estimated to amount to 0.84 percent in the second quarter of 2019. Details»

  2019-05-16 Quantification Forecast update. Swiss growth takes another hit as the May reading of the «KOF Surprise Indicator» logs -0.05 (2018 Q4: -0.03), a level last seen in late 2009. This drop indicates that annual growth has stalled with year-on-year expansion now in negative territory at -0.2 percent in the first quarter of 2019. Details»

Forecast update. The «KOF Surprise Indicator» for measuring Swiss economic activity crashes to -0.030 (down from -0.014), its lowest value in two years. Swiss GDP growth is estimated at a weak 1.9 percent year-on-year implying a nonetheless impressive annual 3.1 percent expansion in 2018. Details»

Financial markets
What's knowledge in economics? In contrast to science that offers the prospect of clear-cut answers to precise questions, economists very often give ambigious if not outright contradictory advice. What may look like as a severe drawback should be embraced as a key and rewarding challenge, this brief note argues (in German). Details»
  2019-01-18 Financial markets
Published. My new book «Uncertainty and Economics» to be published 24th of January 2019! Read in this exclusive preview why uncertainty must be considered as the basis of economic theorising and why - against popular economic belief - emotions, therefore, play a key role in economic decision making. Details»
Financial markets
Lucas critique. Is it rational to apply rational expectations models to economic problems? The Lucas (1976) critique clearly tells that it isn't. Uncertainty offers a reconciliation. Details»
  2018-11-14 Quantification

Forecast update. The «KOF Surprise Indicator» for measuring Swiss economic dynamics flags a healthy expansion of Swiss value added. Its latest reading of -0.014 (up from a revised -0.021) comes close its last high recorded one year ago. The nowcast of Swiss GDP puts Swiss year-on-year growth at 3.5 percent in the third quarter 2018. Details»

Fiscal policy
Economic development. Germany makes headlines owed to outbreaks of violence against foreigners. Some think that this violence is the result of an East German echo chamber within which xenophobic sentiments blossom. This novel analysis shows that the German press contributes to a new East-West divide putting the unification process on hold (in German). Details»
  2018-08-15 Quantification

Forecast update. The Swiss Economy maintains its momentum at large, the latest reading of the «KOF surprise indicator» shows. Despite a drop of the KOF surprise indicator from its latest high to -0.023 (down from a revised -0.019), the nowcast of Swiss GDP growth indicates that Swiss year-on-year growth remains strong at 2.4 percent in the second quarter 2018. Details»

Financial markets
Kapitalismus in den Farben der DDR
Monetary reform. The «sovereign money» proposal in Switzerland stirs considerable discussion. Sometimes it turns paradoxial when opponents switch sides without even being aware (in German). Details»
  2018-05-25 Quantification

Forecast update. No surprises from the «KOF surprise indicator» for measuring Swiss economic dynamics as it stays put at -0.021 (slightly down from -0.020) in 2018, first quarter. This signal of strength combined with slight upward revisions of recent GDP data boosts the nowcast for the Swiss economy. Details»

  2018-04-11 Fiscal policy Debt brakes. Do debt brakes need the «right» design for working properly? No, recent results obtained with a new methodology show. The standard methods in the literature are badly flawed which is why some results may really surprise you. Details»
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