The fruits of Swexit

When the Swiss National Bank scrapped the upper bound for the exchange rate of the Swiss Franc against the euro, the franc immediately surged towards parity against the single European currency and many economists predicted that the Swiss economy would disappear in a black hole.

Four months after the event, there is not much evidence that the earlier dire predictions for the Swiss economy are materializing. The exchange rate appreciation undoubtedly exerts downward pressure on the export industry and makes life difficult for the producers of domestic goods competing with imports. At the same time, however, it generates welfare gains for the population at large.

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