Business Cycles in Switzerland
Given its political neutrality stance and strategic geographic location, Switzerland plays an important role in both the political and economic stages in Europe. To maintain its sovereignty and neutrality, Switzerland has not joined the European Economic Community and the European Union.1 Despite its political neutrality, Switzerland has close economic ties with member countries of the European Union. As a non-member country of the major economic organizations in Europe, Switzerland has incurred substantial economic costs. For instance, Switzerland has to negotiate as a single country with the European Union on tariff and non-tariff barriers.2 Given the significant difference in market sizes, Switzerland’s bargaining power is essentially weak.
KeywordsImpulse Response Business Cycle European Economic Community European Monetary System Forecast Error Variance
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