Switzerland.s Rise to a Wealthy Nation: Competition and Contestability as Key Success Factors

This paper argues that economic competition and political contestability are two key determinants of the successful development of the Swiss economy in the nineteenth and twentieth century. We describe how Switzerland evolved from a relatively poor country with no natural resources and net emigration in 1800 to one of the richest countries of the world two hundred years later. Based on quantitative and qualitative evidence, we argue that early internationalization, open and flexible markets as well as a high degree of competition were crucial for the development of the Swiss economy. In addition, the Swiss political system with its direct democratic elements and the implemented principle of subsidiarity created political contestability that maintained government efficiency and led to political stability throughout history. The combination of these elements seems to explain the Swiss success, but also to make it difficult for otherSwitzerland, development, growth, competition, contestability

The Electric Aharonov-Bohm Effect

In their seminal paper Aharonov and Bohm (1959) claimed that electromagnetic fields can act at a distance on charged particles even if they are identically zero in the region of space where the particles propagate. They proposed two experiments to verify their theoretical conclusions. The magnetic effect, that has been extensively studied, and the electric effect where an electron is affected by a time-dependent electric potential that is constant in the region where the electron is propagating, i.e., such that the electric field vanishes along its trajectory. The Aharonov-Bohm effects imply such a strong departure from the physical intuition coming from classical physics that it is no wonder that they remain a highly controversial issue, after more than fifty years. The existence of electric Aharonov-Bohm effect, that has not been confirmed experimentally, is a very controversial issue. In their 1959 paper Aharonov and Bohm proposed an Ansatz for the solution to the Schroedinger equation in regions where there is a time-dependent electric potential that is constant in space. It consists in multiplying the free evolution by a phase given by the integral in time of the potential. The validity of this Ansatz predicts interference fringes between parts of a coherent electron beam that are subjected to different potentials. In this paper we prove that the exact solution to the Schroedinger equation is given by the Aharonov-Bohm Ansatz up to an error bound in norm that is uniform in time and that decays as a constant divided by the velocity. Our results give, for the first time, a rigorous proof that quantum mechanics predicts the existence of the electric Aharonov-Bohm effect, under conditions that we provide. We hope that our results will estimulate the experimental research on the electric Aharonov-Bohm effect.Comment: This version has been edited. The results are as in version

Sticky Prices and Indeterminacy

The aim of the present paper is to analyze the link between price rigidity and indeterminacy. This is done within a cash-in-advance economy from which we know that it exhibits indeterminacy at high degrees of relative risk aversion. I find that price stickiness reduces the scope of these sunspot equilibria: sluggish price adjustment requires degrees of relative risk aversion compatible with indeterminacy that prove too high to square with data.Cash-in-advance economies; Calvo-pricing; sunspot equilibria.

Interest Rate Rules and Macroeconomic Stabilization

High degrees of relative risk aversion induce indeterminacy in cash-in-advance economies. This paper finds that Taylor-style policies can pre-empt such sunspot equilibria. Specific policy recommendations depend on the fundamentals of the economy, i.e. the empirically true value of coecient of relative risk aversion.cash-in-advance economies, Taylor rules, sunspot equilibria