IMF Working Papers

A New Rule: The Swiss Debt Brake

By Stephan Danninger

February 1, 2002

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Stephan Danninger. A New Rule: The Swiss Debt Brake, (USA: International Monetary Fund, 2002) accessed November 8, 2024
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.

Subject: Budget planning and preparation, Expenditure, Fiscal policy, Fiscal rules, Public debt, Public financial management (PFM)

Keywords: Australia and New Zealand, Budget planning and preparation, Budget rule, Budget surplus, Control expenditure growth, Debt, Debt ratio, Debt rule, Deficit, Expenditure ceiling, Expenditure restraint, Expenditure rule, Fiscal rules, Fiscal sustainability, GDP ratio, Government activity, Government debt target, Spending ceiling, WP

Publication Details

  • Pages:

    27

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2002/018

  • Stock No:

    WPIEA0182002

  • ISBN:

    9781451843651

  • ISSN:

    1018-5941

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