Resilience of Small Open Economies to Geopolitical Shocks: The Case of Switzerland
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Date
2025-03
Publication Type
Working Paper
ETH Bibliography
yes
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Abstract
We extend a quantitative general equilibrium model of global trade networks to evaluate the economic impacts of various trade disruptions. Our analysis considers scenarios such as US-China trade wars, a broader Cold War 2.0 decoupling, Trump-era tariffs, and disruptions in the trade of critical inputs. We assess effects across 34 countries/regions and 38 industries, with a particular focus on Switzerland and its key sectors. We also account for second-layer effects, which can mitigate but, in most cases, amplify or considerably amplify the impacts predicted by our model. By highlighting both vulnerabilities and opportunities within the Swiss economy, we provide insights into the level of resilience of a small open economy to geopolitical shocks.
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published
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Journal / series
Volume
523
Pages / Article No.
Publisher
KOF Swiss Economic Institute, ETH Zurich
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Edition / version
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Date collected
Date created
Subject
Global trade networks; Trump tariffs; Swiss economy
Organisational unit
02525 - KOF Konjunkturforschungsstelle / KOF Swiss Economic Institute
06338 - KOF FB KOF Lab / KOF FB KOF Lab