Natural Hedging of Exchange Rate Risk: The Role of Imported Input Prices

In this paper, we estimate ERPT into imported input prices and export prices using disaggregated quarterly trade data for Switzerland over 2004–2011. We find evidence for high pass-through rates into imported input prices. This demonstrates the effectiveness of natural hedging. On the export side, ERPT exhibits substantial sectoral heterogeneity and changes in imported input costs are not transmitted to foreign consumers in most cases. This suggests the use of cheaper imported inputs to offset adverse effects of currency appreciation on export profit margins.

Disparate Wages in a Globalized World

This study uses wage data from the UBS Prices and Earnings survey to highlight Disparate Wages in a Globalized World from di↵erent perspectives. This wage data is characterised by remarkable consistency over the last 40 years, as well as unusual global comparability. In the first chapter we analyse the convergence hypothesis for purchasing power adjusted wages across the world for 1970 to 2009. The results provide solid evidence for the hypotheses of absolute and conditional convergence in real wages, with the key driver being faster overall growing wage levels in lower wage countries compared to higher wage countries. At the same time, the highest skilled professions have experienced the highest wage growth, while low skilled workers’ wages have lagged, thus no convergence in this sense is found between skill groups. In the second chapter we examine deviations in international wages from Factor Price Equalisation theory (FPE). Following an approach analogous to Engel (1993) we find that deviations from FPE are more likely driven by the higher variability of wages between countries than by the variability of di↵erent wages within countries. With regard to the traditional analysis of the real exchange rate and the Balassa-Samuelson assumptions our analysis points to a larger impact on the real exchange rate likely stemming from the movements in the real exchange rate of tradables, and only to a lesser extent from the lack of equalisation of wages within countries. In the third chapter our results show that India’s economic and trade liberalisation, starting in the early 1990s, had very di↵erential impacts on skill premia, both over time and over skill levels. The most striking result is the large increase in wage inequality of high-skilled versus low-skilled professions. Both the synthetic control group method and the di↵erence-in-di↵erences (DID) approach suggest that a significant part of this increase in wage inequality can be attributed to India’s liberalisation.

Bilateral exchange rates and jobs

We study the labor market effects of realignment in fixed bilateral exchange rates, such as China's peg to the US dollar. We employ the open economy model by de Melo and Robinson to identify the core parameters of the real, trade side of the economy driving the unemployment effects of bilateral exchange rate realignment. A small open economy version of the model is explored analytically and a large multicountry version numerically. Analytics in the small open economy model show that unemployment effects of adjusting of a bilateral peg hinge on the fraction exported to and imported from the trading partner. A larger fraction exported to and a smaller fraction imported from the trading partner make it more likely that revaluation of a trading partner's currency has beneficial effects. Numerics in the large economy model show that Chinese revaluation can generate both positive and negative unemployment effects depending upon underlying parameter values. Adverse unemployment effects can go along with an improving trade balance.

Incidence of bullous pemphigoid and pemphigus in Switzerland: a 2-year prospective study

BACKGROUND: Bullous pemphigoid (BP), pemphigus vulgaris (PV) and pemphigus foliaceus (PF) are autoimmune bullous diseases characterized by the presence of tissue-bound and circulating autoantibodies directed against disease-specific target antigens of the skin. Although rare, these diseases run a chronic course and are associated with significant morbidity and mortality. There are few prospective data on gender- and age-specific incidence of these disorders. OBJECTIVES: Our aims were: (i) to evaluate the incidence of BP and PV/PF in Swiss patients, as the primary endpoint; and (ii) to assess the profile of the patients, particularly for comorbidities and medications, as the secondary endpoint. METHODS: The protocol of the study was distributed to all dermatology clinics, immunopathology laboratories and practising dermatologists in Switzerland. All newly diagnosed cases of BP and pemphigus occurring between 1 January 2001 and 31 December 2002 were collected. In total, 168 patients (73 men and 95 women) with these autoimmune bullous diseases, with a diagnosis based on clinical, histological and immunopathological criteria, were finally included. RESULTS: BP showed a mean incidence of 12.1 new cases per million people per year. Its incidence increased significantly after the age of 70 years, with a maximal value after the age of 90 years. The female/male ratio was 1.3. The age-standardized incidence of BP using the European population as reference was, however, lower, with 6.8 new cases per million people per year, reflecting the ageing of the Swiss population. In contrast, both PV and PF were less frequent. Their combined mean incidence was 0.6 new cases per million people per year. CONCLUSIONS; This is the first comprehensive prospective study analysing the incidence of autoimmune bullous diseases in an entire country. Our patient cohort is large enough to establish BP as the most frequent autoimmune bullous disease. Its incidence rate appears higher compared with other previous studies, most likely because of the demographic characteristics of the Swiss population. Nevertheless, based on its potentially misleading presentations, it is possible that the real incidence rate of BP is still underestimated. Based on its significant incidence in the elderly population, BP should deserve more public health concern.