The Swiss fiscal rule or "debt brake" is applied to simulated data of economic output and fiscal revenues. The budget remains almost perfectly balanced and the debt ratio stable over the medium and long term: The cyclical adjustment of the debt brake is effective in terms of its primary...

This paper describes how the Swiss fiscal rule at federal level has fared since it was introduced in 2003. Generally speaking, the rule has modified the budget process and led to a better implementation of fiscal policy objectives. It is argued that the most important factor is the existence of...