Sustainability of Swiss Fiscal Policy

Gebhard Kirchgässner () and Silika Prohl

Swiss Journal of Economics and Statistics (SJES), 2008, vol. 144, issue I, pages 57-83

Abstract: 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.

Keywords: Sustainability; Budget Deficits; Cointegration; Structural Breaks (search for similar items in EconPapers)
JEL-codes: H62 H63 (search for similar items in EconPapers)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Sustainability of Swiss Fiscal Policy (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Access Statistics for this article

Swiss Journal of Economics and Statistics (SJES) is edited by Klaus Neusser

More articles in Swiss Journal of Economics and Statistics (SJES) from Swiss Society of Economics and Statistics (SSES)
Contact information at EDIRC.
Series data maintained by Peter Steiner ().