Is Switzerland in a great depression?

Timothy J. Kehoe, Kim J. Ruhl

Research output: Contribution to journalComment/debatepeer-review

10 Scopus citations


Abrahamsen, Aeppli, Atukeren, Graff, Müller, and Schips [2005. The Swiss disease: Facts and artefacts. A reply to Kehoe and Prescott. Review of Economic Dynamics 8 (3), 749-758, this issue] object to Kehoe and Prescott's [2002. Great depressions of the 20th century. Review of Economic Dynamics 5 (1), 1-18] characterization of the Swiss economy as being in a great depression over the period 1974-2000. They argue that (1) depressions should be defined in terms of declines in labor productivity rather than in GDP; (2) examining deviations from trend in GDP is equivalent to examining levels; (3) Swiss data from the 1970s should be ignored because it is of low quality and because the 1970s were a period of turmoil in the Swiss labor market; (4) Swiss GDP data should be adjusted to account for appreciations in the terms of trade; and (5) the change in Swiss national accounts from a system based on SNA68 to one based on SNA93 will make Swiss economic performance look better. In this note, we find that none of these arguments have merit except for, possibly, the need to adjust GDP data for changes in the terms of trade. We conclude that Switzerland has indeed suffered a great depression and, in fact, is mired in it even today.

Original languageEnglish (US)
Pages (from-to)759-775
Number of pages17
JournalReview of Economic Dynamics
Issue number3
StatePublished - Jul 2005

Bibliographical note

Funding Information:
✩ The authors acknowledge the financial support of the National Science Foundation. The data used in this article are available at The views expressed herein are those of the authors alone and do not necessarily reflect those of the Federal Reserve Bank of Minneapolis or the Federal Reserve System. * Corresponding author. E-mail address: (T.J. Kehoe).


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