The fiscal and intergenerational burdens of brakes and subsidies for energy prices

Johannes Huber and Christian Scharrer

International Tax and Public Finance, 2024, vol. 31, issue 5, No 4, 1249-1273

Abstract: Abstract We study the effects of different financing rules for untargeted energy price brakes and subsidies on intergenerational welfare in a large-scale overlapping generations model. The results indicate that, in comparison with a laissez-faire solution without any government interventions, debt-financed implementations of such measures are very detrimental for young and future generations. However, the taxation of windfall profits can significantly contribute to reduce the economic burdens of these generations; whereas, the positive effects on older generations are much less pronounced.

Keywords: Fiscal policy; Price brakes; Price subsidies; Energy crisis; Welfare (search for similar items in EconPapers)
JEL-codes: E30 E62 H20 H30 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10797-023-09807-8

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