Effects of Fiscal Rules - 85 Years' Experience in Switzerland

38 Pages Posted: 13 Oct 2016

See all articles by Heiko Burret

Heiko Burret

Walter Eucken Institute

Lars P. Feld

Walter Eucken Institute; University of Freiburg - College of Economics and Behavioral Sciences; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: August 23, 2016

Abstract

The paper investigates the fiscal effects of Swiss cantonal debt brakes by taking explicitly into account the rules’ coverage. An in-depth analysis provides unique evidence that suggests the following: First, fiscal rules at the cantonal level have a negative effect on public deficits, which is stronger the better the analyzed budget position corresponds with the variable targeted by the rules. Second, cantonal debt brakes are rather not associated with substantial evasive measures. Third, cantonal fiscal rules tend to mitigate political budget cycles and shock-related deficits.

Keywords: Switzerland, fiscal rule, debt brake, budget cycle, election, fiscal shock

JEL Classification: H720, H740, H770, D720, K390

Suggested Citation

Burret, Heiko and Feld, Lars P., Effects of Fiscal Rules - 85 Years' Experience in Switzerland (August 23, 2016). CESifo Working Paper Series No. 6063. Available at SSRN: https://ssrn.com/abstract=2851727

Heiko Burret

Walter Eucken Institute ( email )

Goethestrasse 10
Freiburg, 79100
Germany

Lars P. Feld (Contact Author)

Walter Eucken Institute ( email )

Goethestrasse 10
Freiburg im Breisgau, Baden-Württemberg D-79100
Germany

University of Freiburg - College of Economics and Behavioral Sciences ( email )

Freiburg, D-79085
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
50
Abstract Views
279
PlumX Metrics