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The Swedish fiscal policy framework and intermediate fiscal policy targets

Summary

Sweden is a front-runner in defining intermediate targets for fiscal policy (fiscal rules) as well as in setting up an independent fiscal council to monitor and comment on developments. Swedish public finances are among the most sound in the OECD having been able to consolidate public finances and ensure fiscal sustainability, and they have maintained room for fiscal manoeuvre also during the financial crisis. This paper takes a closer look at the Swedish case as the stepping stone for a more general discussion of how to set intermediate targets for fiscal policy and the role fiscal councils may have in strengthening political accountability and thus ultimately credibility of fiscal policy. The Swedish fiscal framework is compared to the fiscal compact for EU countries, and it is argued that it has a number of desirable features.

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This paper is based on a presentation at the conference “The Swiss Debt Brake — Ten Years On”, Study Center Gerzensee. Comments and suggestions by the participants are gratefully acknowledged. The author served as deputy chairman of the Swedish Fiscal Policy Council in the period 2007–2011.

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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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Andersen, T.M. The Swedish fiscal policy framework and intermediate fiscal policy targets. Swiss J Economics Statistics 149, 231–248 (2013). https://doi.org/10.1007/BF03399391

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  • DOI: https://doi.org/10.1007/BF03399391

JEL-Classification

  • H6

Keywords

  • debt
  • debt brake
  • fiscal rules
  • Sweden