The German Energy Crisis: A TENK-based Fiscal Policy Analysis

Alexandra Gutsch and Christoph Schult

No 1/2025, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: We study the aggregate, distributional, and welfare effects of fiscal policy responses to Germany’s energy crisis arising in 2022 using a novel ten-agent New Keynesian (TENK) model. The crisis, compounded by the COVID-19 pandemic, led to sharp price increases and significant consumption disparities. Our model, calibrated to Germany’s income and consumption distribution, evaluates key policy interventions. We find that non-targeted transfers had the largest short-term aggregate impact, while targeted transfers for lower income households were more cost-effective. The energy cost brake and reductions in gas and oil taxes have shown very little effect, but were comparatively cost-effective under the assumption of exogenous prices. Our results highlight how targeted fiscal measures can address distributional effects and stabilize consumption during crises.

Keywords: DGE; energy crisis; fiscal policy; income distribution; TENK (search for similar items in EconPapers)
JEL-codes: E21 E62 Q43 Q48 (search for similar items in EconPapers)
Date: 2026, Revised 2026
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/309416.3/1 ... utsch-Schult-rev.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhdps:309416

DOI: 10.18717/dpdtzw-4c15

Access Statistics for this paper

More papers in IWH Discussion Papers from Halle Institute for Economic Research (IWH) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().