Sustainability of Swiss Fiscal Policy

Artikel

Was Swiss federal fiscal policy sustainable over the period from 1900 to 2002? We perform unit root and cointegration tests for federal revenues and expenditures, taking into account a structural shift related to World War II. We find sustainability over the entire period. However, splitting the sample into two sub-samples before and after World War II, the results do much less support sustainability. Finally, applying the tax smoothing model of BARRO (1979), we show that cyclical fluctuations of the output and changes in expected inflation rate are major determinants of the federal budget deficit over the time period considered.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Swiss Journal of Economics and Statistics ; ISSN: 2235-6282 ; Volume: 144 ; Year: 2008 ; Issue: 1 ; Pages: 57-83 ; Heidelberg: Springer

Classification and Topics

• Classification: Wirtschaft ; National Deficit; Surplus ; National Debt; Debt Management; Sovereign Debt
• Subject: Sustainability ; Budget Deficits ; Cointegration ; Structural Breaks

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kirchgässner, Gebhard ; Prohl, Silika
• Event: Veröffentlichung
• (who): Springer
• (where): Heidelberg
• (when): 2008

Further information

• DOI: doi:10.1007/BF03399249
• Handle: http://hdl.handle.net/10419/185883