into the pension sector that individuals perceive as personal income. for their part, businesses have often viewed defined - benefit pension plans, in effect, as business - sector profit centers because capital gains affect corporate defined - benefit pension contributions and, hence, earnings. this consideration is relevant in the measurement and interpretation of the personal saving rate. in recent years, contributions to private defined - benefit plans have declined significantly as an increasing part of these plans ’ accrued benefit liabilities have been met through a rise in the market value of their equity holdings. offsetting this decline, to some extent, has been an increase in dividend and other capital income. if private and state and local defined - benefit pension plans had been separated from the personal sector, the personal saving rate would have fallen about 3 / 4 percentage point less from 1995 to 2000, all else being equal. all told, if households viewed taxes on capital gains as a subtraction from those gains and not from income and, further, if households viewed benefit payments received from defined - benefit plans as income rather than their employers ’ contributions ( as well as the investment income of the plans ), perceived disposable income in 2000 would have been higher as would the personal saving rate. in short, roughly two - fifths of the measured decline in the personal saving rate since 1995 reflects the foregoing nipa income - accounting conventions. i should emphasize that any accounting adjustments made to personal saving because of changes in the definition of disposable income are exactly offset in business and government saving so that national saving is unaffected. the increment to personal saving associated with a treatment of the private defined - benefit pension sector as a business profit center would be offset by a decline in corporate profits and business saving. in addition, a designation of taxes on capital gains as capital transfers ( in a manner similar to estate and gift taxes ) would raise measured personal saving and lower overall tax receipts and, hence, government saving. thus, while total national saving would be unaffected by these specific accounting adjustments for capital gains, the distribution of nipa saving among households, businesses, and governments would be significantly influenced. one must recognize that no single way to array information on income, production, and capital gains is best. the particular array employed depends on the specific purposes to which the data set is to be applied. the treatment of capital gains in the nipa, for example, is intended to allow the accounts to most accurately attribute national saving to the various sectors in the

global inflation expectations appear to be well anchored. the growth outlook for switzerland remains constructive, supported by an expansionary monetary policy stance. the rise in oil prices has, however, dampened domestic demand. weakness in germany and, more recently, in france are exacerbating the situation. economic growth is unlikely to accelerate into 2005. upward pressure on the exchange rate may exert additional unwelcome downward pressure on aggregate demand. some slack in swiss labor and product markets is likely to prevail. the output gap will close in 2006 at the earliest. in such an environment, it will take time for the unemployment rate to decline from the current 3. 7 %. real wage growth is well contained with growth rates fluctuating around 1 % per year since 2001. core inflation rates remain moderate at around 1 %. despite substantially higher oil price related cpi and ppi inflation since august of this year, longer - term inflation expectations remain firmly anchored as swap spreads and consensus forecasts confirm. the growth rates of swiss monetary aggregates and the development of credit confirm the overall picture of a moderate inflation outlook. the key challenge for monetary policy authorities - in switzerland and elsewhere - will be to continue to firmly anchor these longer - term inflation expectations. as i mentioned earlier, notwithstanding high oil prices, circumstances are favorable. price stability has been all but achieved in much of the developed world. even developing countries are enjoying relatively low and stable inflation rates. various forms of credible monetary policy frameworks are anchoring future inflation expectations. higher oil prices appear to feed through to higher headline inflation more rapidly than in the past but the magnitude of the effect appears to have declined. finally, the world economy is hardly overheating. indeed, judging by the oecd ’ s global leading indicator, the recent growth momentum is abating. moreover, to the extent that the recent oil price shock is to a significant extent demand driven, dampening global growth will at least to some extent be self - stabilizing with regard to underlying inflation pressure. compared to the time of the last great oil shock in the late 1970s, monetary authorities operate under a different paradigm to the extent that they can afford to “ look through ” what are likely to be temporary spikes in headline inflation associated with what is likely to be a demand driven level shift in the equilibrium price range of oil. indeed, in some cases, monetary policy may find itself in a position to be able to respond to the output loss associated with higher oil prices