Abstract
I investigate whether demand growth and productivity growth in Switzerland have benefitted from the wage moderation that set in at the beginning of the 1990s in this country. The results suggest that the Swiss demand regime is profit-led while the productivity regime is wage-led. This means on the one hand that wage moderation has added almost one Percentage Point to Gross Domestic Product (GDP) growth after 1990. On the other hand, it has also contributed to the drop in productivity growth. The latter effect, however, is weak.
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