A New Rule: "The Swiss Debt Brake"

 
Author/Editor: Danninger, Stephan
 
Publication Date: February 01, 2002
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: The paper provides an international comparison and a comprehensive analysis of a new fiscal expenditure rule for the federal government in Switzerland. The proposed rule has two innovative features: it aims at a structurally balanced budget in the short-run by annually setting a cyclically adjusted expenditure ceiling, and it arrests the accumulation of public debt via corrections of future expenditure targets for past deviations from projected fiscal balances. The paper finds that the new rule is likely to reduce procyclical tendencies in fiscal policy and that its objectives are adequate in meeting long-run fiscal challenges arising from demographic changes.
 
Series: Working Paper No. 02/18
Subject(s): Fiscal management | Switzerland | Budgets | Public debt | Economic models

Author's Keyword(s): Fiscal rules | fiscal sustainability
 
English
Publication Date: February 01, 2002
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA0182002 Pages: 27
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