The Fiscal and Intergenerational Burdens of Brakes and Subsidies for Energy Prices

Christian Scharrer () and Johannes Huber ()
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Christian Scharrer: University of Augsburg, Department of Economics, https://www.uni-augsburg.de/de/fakultaet/wiwi/prof/vwl/heer/team/christian-scharrer/
Johannes Huber: University of Regensburg, Department of Economics, https://www.uni-regensburg.de/wirtschaftswissenschaften/vwl-kindermann/team/johanneshuber/index.html

No 346, Discussion Paper Series from Universitaet Augsburg, Institute for Economics

Abstract: We study the effects of different financing rules for untargeted energy price brakes and subsidies on intergenerationalwelfare in a large-scale overlapping generations model. The results indicate that, in comparison to 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: 2023-08
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Persistent link: https://EconPapers.repec.org/RePEc:aug:augsbe:346

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