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Sustainability of Swiss Fiscal Policy

Summary

We examine whether Swiss federal fiscal policy was 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 in the budgetary process related to World War II. We find sustainability considering the entire period. However, splitting the sample into two sub-samples before and after World War II, the results do much less support sustainability.

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Correspondence to Gebhard Kirchgässner.

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Open Access This article is distributed under the terms of the Creative Commons Attribution 2.0 International License ( https://creativecommons.org/licenses/by/2.0 ), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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Kirchgässner, G., Prohl, S. Sustainability of Swiss Fiscal Policy. Swiss J Economics Statistics 144, 57–83 (2008). https://doi.org/10.1007/BF03399249

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Keywords

  • Sustainability
  • Budget Deficit
  • Cointegration
  • Structural Breaks

JEL-Classification

  • H62
  • H63