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Macroeconomic effects of fiscal policy under an energy supply shock
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.
ESSCA School of Management, France.
Norges Bank, Norway.
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.
2025 (English)In: Energy Policy, ISSN 0301-4215, E-ISSN 1873-6777, Vol. 203, article id 114616Article in journal (Refereed) Published
Abstract [en]

We study the macroeconomic effects of four fiscal policy responses to an energy supply shock: energy vouchers to all households, energy vouchers only to low-income households, energy vouchers to non-energy goods producers, and subsidies for investments in the energy sector. The analysis is carried out in a DSGE model that explicitly includes the energy sector. Calibrating the model to Swedish data, our results show that subsidies for investment in the energy sector are the most effective instrument to reduce energy prices in the short to medium term. However, this policy is welfare-dominated by energy vouchers given to households, as it immediately compensates low-income, non-saving households in the event of a shock. Providing energy vouchers to non-energy firms prevents energy prices from falling as quickly as they would without policy intervention and is also the least desirable from a welfare perspective.

 

Place, publisher, year, edition, pages
Elsevier, 2025. Vol. 203, article id 114616
Keywords [en]
Energy price, Investment subsidy, Energy voucher
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:umu:diva-237434DOI: 10.1016/j.enpol.2025.114616ISI: 001468748800001Scopus ID: 2-s2.0-105002113545OAI: oai:DiVA.org:umu-237434DiVA, id: diva2:1950958
Available from: 2025-04-09 Created: 2025-04-09 Last updated: 2025-05-06Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
  • ieee
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  • vancouver
  • Other style
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  • de-DE
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  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
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  • Other locale
More languages
Output format
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  • asciidoc
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