A New Rule : The Swiss Debt Brake

Author/Editor:

Stephan Danninger

Publication Date:

February 1, 2002

Electronic Access:

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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):

English

Publication Date:

February 1, 2002

ISBN/ISSN:

9781451843651/1018-5941

Stock No:

WPIEA0182002

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

27

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