{"title":"Does the Swiss Debt Brake Induce Sound Federal Finances? A Synthetic Control Analysis","authors":"Christian F. Pfeil, Lars P. Feld","doi":"10.1177/10911421231191566","DOIUrl":null,"url":null,"abstract":"The Swiss debt brake is widely appreciated as one of the most rationally designed fiscal rules in the world and was thus also discussed as a blueprint in the debates about fiscal rules in Germany, the European Union member states and Israel. However, evidence that this rule really contributes to sound federal finances, in the sense of reducing the cyclically adjusted deficits, does not exist yet. We investigate the effectiveness of the Swiss debt brake by employing the Synthetic Control Method. We find that the introduction of this fiscal rule improved the budget balance by about 3.7 percentage points on average in a post-intervention period covering five years.","PeriodicalId":46919,"journal":{"name":"PUBLIC FINANCE REVIEW","volume":"17 1","pages":"0"},"PeriodicalIF":0.5000,"publicationDate":"2023-09-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"10","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"PUBLIC FINANCE REVIEW","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1177/10911421231191566","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q4","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 10
Abstract
The Swiss debt brake is widely appreciated as one of the most rationally designed fiscal rules in the world and was thus also discussed as a blueprint in the debates about fiscal rules in Germany, the European Union member states and Israel. However, evidence that this rule really contributes to sound federal finances, in the sense of reducing the cyclically adjusted deficits, does not exist yet. We investigate the effectiveness of the Swiss debt brake by employing the Synthetic Control Method. We find that the introduction of this fiscal rule improved the budget balance by about 3.7 percentage points on average in a post-intervention period covering five years.
期刊介绍：
Public Finance Review is a professional forum devoted to US policy-oriented economic research and theory, which focuses on a variety of allocation, distribution and stabilization functions within the public-sector economy. Economists, policy makers, political scientists, and researchers all rely on Public Finance Review, to bring them the most up-to-date information on the ever changing US public finance system, and to help them put policies and research into action. Public Finance Review not only presents rigorous empirical and theoretical papers on public economic policies, but also examines and critiques their impact and consequences. The journal analyzes the nature and function of evolving US governmental fiscal policies at the national, state and local levels.
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