The central bank does not manage real wages, the labour supply, employment or the level of unemployment in the long run. But, if price-stability is firmly anchored, the central bank can help to reduce short-term economic fluctuations. While central bank independence promotes price stability, researchers do not find a discernible connection between central bank independence and real economic variables such as GDP growth or unemployment (see Alesina, A. and L.H. Summers (1993), “Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence”, Journal of Money, Credit and Banking, Vol. 25, No. 2., pp. 151–162). 27  The principle whereby the new state would have its own monetary system, separate from Sweden, was written into the November Constitution in the same year. Here the word “bank” is also used for the first time. In keeping with the emerging liberal thinking of the time, keeping the value of money secure was considered essential, a prerequisite for the liberty of the citizenry. 28  This journey time is for transport with a military escort. A post rider was able to make the journey considerably faster. Only after confidence in the new institution had been established – several generations later – was the Bank moved to Kristiania. Incidentally, the desire to compensate for the loss of the Bank was one of the reasons that Trondhjem was chosen as the location for another institution, the Norwegian Institute of Technology.
Confidence indices and leading indicators were all pointing up, reinforcing the view that the economy was on track. As is the case abroad, the most recent economic figures question whether the recovery scenario for 2002 remains valid. Information from various economic indicators is painting a consensus picture of weak growth. The negative numbers cover the broad contours of the Swiss economy. These sectors include construction, investment, tourism, financial services, and export-oriented industries. None of this means that the Swiss economy is not able to stay afloat. But those that have steered a ship know: it is not enough to have water under the rudder, one needs to plot continuously a course that will safeguard the vessel. The first rule of caution in seamanship and in monetary policy - is to keep away from situations in which adverse shocks will lead to trouble. With the recent interest rate reductions in the target range, we have tried to steer a prudent course that seeks to offset potential adverse shocks that would jeopardize economic recovery in Switzerland. nd  On May the 2 , we lowered the target range for the three-month Libor by 0.5 percentage points to 0.75% to 1.75%. With this step, we reacted to the rapid appreciation of the Swiss franc against the major currencies, which led to an undesirable tightening of monetary conditions in Switzerland, thereby threatening the economic recovery. th  We reduced the interest rate range by a further 50 basis points on July 26 .