Elections, Exchange Rates, and Foreign Currency Debt: Swiss Francs and the 2015 Polish Elections

Abstract: Taking advantage of the surprise decision of the Swiss National Bank in early 2015 to let the Swiss franc appreciate, we examine how international economic relations and policy affect the political attitudes and behavior of voters. Because many households in several Central European countries, such as Poland, hold mortgages denominated in Swiss francs, the large franc appreciation significantly hurt these households financially. This paper investigates whether this policy change affected voters evaluations of the government. For this purpose, we use two sources of data: 1) survey data from a Polish public opinion poll fielded immediately after the SNB decision; and 3) an original survey experiments fielded immediately before the 25 October Polish elections. The experiment exploits variation in existing policy responses to exchange rate-rate shocks and the fact that different policy proposals about this issue have played an important role in the ongoing Polish election campaign.