This text contains the autumn forecast 2014 of the KOF Swiss Economic Institute at ETH Zurich, released on 29 October 2014. The first part discusses recent economic developments in Switzerland and abroad, and presents the main forecast results across the various sectors of the economy....

In the aftermath of the 2007–2009 crisis, banks claiming positive diversification benefits are being met with skepticism. Nevertheless, diversification might be important and sizable for some large internationally active banking groups. We use a universally applicable correlation matrix...

This paper attempts to assess the impact of skill loss on the persistence of cyclical unemployment. The observations from the Current Population Survey and the Bureau of Labor Statistics suggest a countercyclical total unemployment rate that exhibits high persistence. A framework that features...

Output gap estimates are subject to a wide range of uncertainty owing to data revisions and the difficulty in distinguishing between cycle and trend in real time. This is important given the central role in monetary policy of assessments of economic activity relative to capacity. We show that...