A New Rule: 'The Swiss Debt Brake'

27 Pages Posted: 31 Jan 2006

See all articles by Stephan Danninger

Stephan Danninger

International Monetary Fund (Research Department)

Date Written: January 2002


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.

Keywords: Fiscal rules, fiscal sustainability

Suggested Citation

Danninger, Stephan, A New Rule: 'The Swiss Debt Brake' (January 2002). IMF Working Paper No. 02/18, Available at SSRN: https://ssrn.com/abstract=879354

Stephan Danninger (Contact Author)

International Monetary Fund (Research Department) ( email )

700 19th Street, NW
Washington, DC 20431
United States

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