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A New Fiscal Rule :, Should Israel “Go Swiss?”, Steven Symansky, Xavier Debrun, Natan Epstein

A New Fiscal Rule :, Should Israel “Go Swiss?”, Steven Symansky, Xavier Debrun, Natan Epstein
We propose a fiscal rule that fulfills a specific debt reduction objective while maintaining significant fiscal flexibility-two overarching concerns in Israel. Not unlike the Swiss "debt brake," the rule incorporates an error-correction mechanism (ECM) through which departure from the debt objective affects binding medium-run expenditure ceilings. Two variants of our ECM rule are shown to be superior to a comparable deficit rule in terms of attaining the debt objective and allowing for fiscal stabilization while supporting medium-term expenditure planning. Given its relative sophistication, a proper implementation of the ECM rule requires supportive fiscal institutions, including independent input and assessment
Bibliography note
Includes bibliographical references
international or intergovernmental publication
Literary Form
non fiction
Main title
A New Fiscal Rule :
Nature of contents
Responsibility statement
Steven Symansky, Xavier Debrun, Natan Epstein
Series statement
IMF Working Papers
Sub title
Should Israel “Go Swiss?”
Table Of Contents
Contents; I. Introduction; II. Fiscal Rules in Israel-Historical Context; Figures; 1. General Government Finances, 1980-2006; 2. International Comparison: General Government Finances, 2003-06; III. Recent International Experience; A. The Growing Appetite for Fiscal Rules; Tables; 1. Central Government: DRL Ceiling Versus Actual Deficits, 1992-2009; 2. International Comparison of Fiscal Rules; B. Flows, Stocks, and the Rule's Ultimate Objective; IV. A New Fiscal Rule for Israel-A Debt Brake Approach; A. A Swiss-Like Error Correction Mechanism; 3. Scenario Analysis One, 2009-17B. An Expenditure Rule with a Debt FeedbackC. Comparing the Proposed Rules: Hitting the Debt Target While Preserving Automatic Stabilization; 3. Comparative Performance of Alternative Fiscal Rules for Israel, 2010-15; 4. Simulated Debt Path Under Various Fiscal Rules, 2009-17; V. Institutional Considerations; VI. Conclusion; Appendix; Algebra for the Debt-Feedback Expenditure Rule; References
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