QUESTION: Except in Switzerland, unemployment rate is at a low 3% despite the high costs.
ANSWER: Why? Capital INFLOWS. Switzerland is the #1 place to live and it is outside of EU and USA. There is concern that so many Europeans are trying to get in and this drives up inflation because they increase the money supply by importing cash. The same is true in Singapore where the housing costs have risen because of all the importation of capital.
The economic decline with rising costs is indicative of a shrinking capital formation that is also often associated with (1) hoarding of capital domestically, or (2) capital flight (exports).