TY  - UNPD
A1  - Blanz, Alkis
A1  - Eydam, Ulrich
A1  - Heinemann, Maik
A1  - Kalkuhl, Matthias
A1  - Moretti, Nikolaj
T1  - Fiscal Policy and Energy Price Shocks
T2  - CEPA Discussion Papers
N2  - The effects of energy price increases are heterogeneous between households and firms. Financially constrained poorer households, who spend a larger relative share of their income on energy, are particularly affected. In this analysis, we examine the macroeconomic and welfare effects of energy price shocks in the presence of credit-constrained households that have subsistence-level energy demand. Within a Dynamic Stochastic General Equilibrium (DSGE) model calibrated for the German economy, we compare the performance of different policy measures (transfers and energy subsidies) and different financing schemes (income tax vs. debt). Our results show that credit-constrained households prefer debt over tax financing regardless of the compensation measure due to their difficulty to smooth consumption. On the contrary, rich households tend to prefer tax-financed measures as they increase the labor supply of poor households. From an aggregate perspective, tax-financed measures targeting firms effectively cushion aggregate output losses.
T3  - CEPA Discussion Papers - 70 
KW  - energy prices
KW  - E-DSGE
KW  - fiscal policy
KW  - welfare
Y1  - 2023
UR  - https://publishup.uni-potsdam.de/frontdoor/index/index/docId/61276
UR  - https://nbn-resolving.org/urn:nbn:de:kobv:517-opus4-612763
SN  - 2628-653X
IS  - 70
ER  -