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Impact Of A Modified Hp Filter On Countercyclical Behavior Of The Swiss Fiscal Rule

Author

Listed:
  • Adam Pigon

    (Swiss Institute for Empirical Economic Research, Switzerland)

  • Michal Ramsza

    (Warsaw School of Economics, Poland)

Abstract

Fiscal rules are an idea that has been getting more attention lately due to the recent economic crisis. Fiscal rules has been tested for many properties, including countercyclical behavior. The present paper focuses on the Swiss fiscal rule and investigates the impact of a modified HP filter, used in the rule, on countercyclical behavior of the rule. The paper uses real GDP time series for over a hundred countries and applies the rule to each time series in two variants, with a standard HP filter and a modified HP filter. For each result procyclicality indices are calculated. It is found that the modification of HP filter, used in the Swiss fiscal rule, increases countercyclical behavior of the rule.

Suggested Citation

  • Adam Pigon & Michal Ramsza, 2016. "Impact Of A Modified Hp Filter On Countercyclical Behavior Of The Swiss Fiscal Rule," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 11(4), pages 661-674, December.
    • Handle: RePEc:pes:ierequ:v:11:y:2016:i:4:p:661-674
    DOI: 10.12775/EQUIL.2016.029
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    References listed on IDEAS

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    Cited by:

    1. Adam Pigoń & Michał Ramsza, 2022. "A Comparison of German, Swiss, and Polish Fiscal Rules Using Monte Carlo Simulations," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 4, pages 17-41.

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    More about this item

    Keywords

    fiscal rule; counter cyclical policy;

    JEL classification:

    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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