Switzerland - Demand-Side Policy

 Switzerland has maintained an unemployment level of around 4% for the past two decades, however,  in 2021, they broke the 5% level with unemployment of 5.32%. 

In this graph, you can see Switzerland's unemployment rate from 1999 to 2021. Their unemployment numbers follow the general state of the global economy, suggesting that Switzerland has consistent and standard rates of unemployment. They have also consistently stayed below the global unemployment rate and the European unemployment rate. This quote by Jean-Pierre Danthine andJean-Christian Lambelet from the book; The Swiss Recipe shows how the Swiss handle economic policy. "First, macroeconomic policies are not actively used. Fiscal policy focuses more on balancing the budget than on counteracting business cycles. Monetary policy is preoccupied with a stable growth path for its chosen target, although the short-run policy is pragmatic rather than rigid. Second, the labor market is best described as a vast number of bilateral monopolies, mostly at the firm level" (Danthine, Lambelet). This quote suggests that the Swiss rely on the market systems present in their country rather than monetary intervention. Although they have used quantitative easing and base rate changes like most countries through the central bank, the Swiss Frank has maintained its value well and the unemployment rate remains dismal. It is important to note that a large percentage of the workforce are Swiss citizens. Switzerland is very secluded and self-sustaining economically within the country's borders. They also have a very strict immigration policy and have avoided the refugee crisis due to their seclusion from the EU. 

Sources: https://www.statista.com/statistics/263707/unemployment-rate-in-switzerland/ 
https://academic.oup.com/economicpolicy/article-abstract/2/5/147/2392313?redirectedFrom=PDF 

Comments

Post a Comment

Popular posts from this blog

Spain Demand Side Policies

  There are many things to be interested in when it comes to Spain. When it comes to the question of being somewhat recent, the unemployment rate is absolutely something that we should look into. In this case, Spain very strongly mirrors the United States. The cause of their unemployment crisis was the real estate bubble popping and the subsequent fallout from that.The worst of this fall out came in 2014, when unemployment skyrocketed and reached the peak of 27.2. It since then has calmed down, but it shows that thats very difficult to navigate through and very long lasting. Additionally it shows the strength of the American economy that just us crashing ruins others. There was many problems taking place, but one of the clearest was a mismatch between the employers and the populace. Even though people were out of work, and employers said that they were having trouble finding qualified candidates for their positions. One of the other issues was that there were so many people that we...
Read more

Netherlands: How effective are Demand-side policies

Image
 Netherlands: Unemployment How effective are Demand- Side Policies? In 2019 the unemployment rate was 3.4%. In 2020 it was 3.8%, while in 2021 it was 4%. As shown during the pandemic the unemployment rate in the Netherlands increased. To counteract the rising unemployment rate the Netherlands enacted supply side policies. The Netherlands created a social package to increase training and retraining effort, to help lessen job- losses, paying portions of workers wages. These policies did help the Netherlands curb a major increase in unemployment, as shown in the unemployment rate during 2020. The removal of these support methods is causing a risk for a higher unemployment rate, which can be seen with the increase to 4% in 2021.  Demand- side policies could have been enacted instead of supply side policies. The OECD 2021 Economic Survey of the Netherlands, had some suggestions about using fiscal policies, but also claimed that highly expansionary and quick fiscal policy could dera...
Read more

Switzerland - Andy Walsh

Image
Switzerland has one of the highest GDP per capacity rankings in the world. Although not a member of the EU, this European country has been successful in every factor of production to some extent. The Swiss labor force is currently very strong. Boasting a very high literacy and employment rate (qualitative) and a large number of workers in their mid-twenties to late thirties (quantitative) as seen in figure 1.1.   However, despite a highly educated population, a quantitative change in the labor force will soon occur. Currently, the large group of Swiss workers nearing retirement has a strong labor force behind them to continue to generate national revenue. However, the opposite is true for the current 25-40-year-olds. As they reach the age of retirement, the amount of workers in the labor force drastically decreases, causing a dangerous economic situation for the country that will make GDP growth far more challenging. This drop in population would cause the AS/LRAS curve to shi...
Read more