Policy Responses to High Energy and Food Prices

David Amaglobeli, Mengfei Gu, Emine Hanedar, Gee Hee Hong and Celine Thevenot

No 2023/074, IMF Working Papers from International Monetary Fund

Abstract: The surge in energy and food prices, which was amplified by Russia’s invasion of Ukraine, has prompted a flurry of policy responses by countries during 2022. The aim of these policy responses was to mitigate social and economic impact of higher prices. In this paper we document announcements of policy measures based on the Database of Energy and Food Price Actions (DEFPA), which was developed based on two rounds of survey responses of IMF country teams conducted in March/April and June/July of 2022. The paper also provides discussion on policy trade-offs when considering appropriate policy responses both for countries with strong and weak social safety nets. Key policy message is that providing targeted support to households in the form of cash transfers is the most cost-effective way of alleviating the burden on vulnerable households and have to be preferred over broad-based mechanisms that prevent international prices to pass through to domestic consumers.

Keywords: Energy prices; food Prices; cost of living; social policy; IMF country team; demand and supply response; A. pass-through; Policy measure (search for similar items in EconPapers)
Pages: 70
Date: 2023-03-24
New Economics Papers: this item is included in nep-agr, nep-cis, nep-ene and nep-tra
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