A comparision between the Swiss and Australian economy

Essay by skyfox01High School, 11th gradeA+, March 2005

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When we look at the Swiss economy we can see immediately that it is almost opposite of our own economy. It has a high franc, which has no real threat to their exports due to the specializations of their industries (e.g. Pharmaceuticals and watches) which are in high demand and whose prices don't decrease dramatically. Their high franc is also useful to all industries due to the fact that Switzerland itself doesn't have many types of resources, so their high franc can buy more resources which are mostly used to create products for export. Their interest rate is also extremely low, as is unemployment. Switzerland can attract people to put money into their banks and institutions due to their stability and safety. The Swiss economy is also very stable - their boom and bust cycle is kept so that it is stable unlike Australia which has tended to get to very big booms and also very big busts.

The Australian economy has to regulate its dollar to help exports of its resources; the prices of which fluctuate constantly. Australia has to increase interest rates to attract people to invest and place money in Australia; it also increases interest rates to keep inflation in check. From this simple comparison we can already see that the Swiss and Australian Economy is very different and that their responses to different issues would naturally be different.

Switzerland has had the least inflation of any country in the past century. At any point in time, Switzerland's inflationary history was similar to that of the rest of the world, but its actual inflation rates were lower. Its inflation rate is currently still very low around 1.3%. Australia is currently staying at 2-3%.

Switzerland has followed an explicit policy of minimizing inflation. The Swiss National Bank is...