Keywords: oil prices, structural modelling, macroeconometric modelling, Switzerland, Swiss economy, GDP growth, demand-side components, labour market, capacity output, simulation, economic performance, economic growth, monetary policy
Macroeconomic effects of high oil prices on the Swiss economy: 2003?2008
In this paper, we examine the macroeconomic impact of the high oil price era between 2003 and mid-2008 on the Swiss economy. Using a medium-scale disequilibrium macroeconometric model, we focus not only on the effects of oil prices on the real GDP growth but also on their effects on demand-side components, prices, labour market and capacity output. Our simulation results indicate that high oil prices still had a non-negligible negative impact on economic performance despite the observed above average real economic growth rates. We have also found that an accommodative monetary policy might help in smoothing the negative effects of oil price shocks.