Through following monetary targets, the Swiss National Bank was, for many decades, one of the most stability-oriented central banks in the world. Since the year 2000 monetary policy in Switzerland has been based mainly on inflation forecasts. In the short-run statistical time-series models play a role, whereas for the medium-run forecasts, structural VARs and structural macromodels, amongst others, are employed.
However, monetary aggregates, in particular M3, continue to play an important role as indicators. 4 In particular, long-term inflation forecasts based on monetary growth are an important ingredient of the Swiss National Bank’s strategy. 5 Recent studies underline the relevance of (filtered) monetary developments for future inflation in Switzerland. 6 This brings me to the ECB’s strategy and its forecasting needs.