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Home / Dirk Niepelt / “Schuldenbremse — Licht und Schatten (Debt Brake—Merits and Risks),” FuW, 2021

“Schuldenbremse — Licht und Schatten (Debt Brake—Merits and Risks),” FuW, 2021

Summary:
Finanz und Wirtschaft, June 5, 2021. PDF. The debt brake addresses some political economy frictions, but not others. Focusing too narrowly on explicit government debt it provides incentives to accumulate implicit debt, sell assets, or engage in creative accounting. The political pressure to raise SNB profit disbursements is a symptom of these incentives.

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Finanz und Wirtschaft, June 5, 2021. PDF.

  • The debt brake addresses some political economy frictions, but not others.
  • Focusing too narrowly on explicit government debt it provides incentives to accumulate implicit debt, sell assets, or engage in creative accounting.
  • The political pressure to raise SNB profit disbursements is a symptom of these incentives.
Dirk Niepelt
Dirk Niepelt is Director of the Study Center Gerzensee and Professor at the University of Bern. A research fellow at the Centre for Economic Policy Research (CEPR, London), CESifo (Munich) research network member and member of the macroeconomic committee of the Verein für Socialpolitik, he served on the board of the Swiss Society of Economics and Statistics and was an invited professor at the University of Lausanne as well as a visiting professor at the Institute for International Economic Studies (IIES) at Stockholm University.

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