The Costs of the EU Integration for Switzerland: Alternative Scenarios
This paper is based on a more comprehensive study by Vaterlaus, Himmel, Koellreuter and Simmons (1999) 1 which was commissioned by the Secretariat for Economic Affairs (SECO) in an attempt to evaluate the economic effects of a Swiss entry into the European Union (EU) from the year 2002. Given the ex-ante nature of the study, our analysis using a macro-model framework relies heavily on introducing various shocks in an exogenous manner, and using our judgement in a pragmatic way in forming assumptions, where the nature of the current model is inadequate to address certain issues. Although our approach can be criticised for containing some ad-hoc elements, various sensitivity tests reveal that the main conclusions of the study are not challenged a great deal by different formulation of the shocks in question.
KeywordsExchange Rate Interest Rate European Union Monetary Policy Real Interest Rate
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