A New Rule: "The Swiss Debt Brake"
AbstractThe 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.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 02/18.
Date of creation: 01 Feb 2002
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