The Swiss National Bank (SNB
) has recently adapted its monetary concept in various respects. In implementing monetary policy, the SNB henceforth targets the interest rate level on the money market rather than the amount of liquidity, that continues to play a complementary role as a monetary indicator.
This new strategy confirms the results obtained by the author. On one hand, they come from the description of SNB behavior by a forward-looking rule explaining not only monetary aggregates but interest rates as well. On the other hand, these results are based on an overall indicator of monetary policy able to catch such changing strategies over time. These outcomes heavily challenge the traditional role of money stocks in the SNB's monetary policy.
Rule estimation shows that since the mid-nineties the SNB has been already steering a money market rate as policy instrument. Concerning the indicator, only the eighties appear as the golden age of monetarism. However, the end of the seventies seems to have been guided by an exchange rate targeting strategy. Finally, the indicator assesses the switch to money market rates for the nineties.
In his third part, the author interpolates a monthly gross domestic product (GDP) used in both previous parts about Swiss monetary policy. This series is produced with help of related series within a Kalman filter framework. Moreover, this interpolated GDP avoids using proxy variables.