The Euro Area in Between Crises? Considerations on Fiscal Policies and Rules

Checherita‐Westphal, Cristina; Hauptmeier, Sebastian; Leiner-Killinger, Nadine

doi:10.1007/s10272-022-1079-9

Cited by 3 publications

(2 citation statements)

References 6 publications

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“…For instance, substantial fiscal packages in 2020 for COVID-19 are estimated to be slightly above 4% of GDP in the EU (Haroutunian et al, 2021). Euro area discretionary fiscal support in response to the war in Ukraine is estimated at close to 1% of GDP in 2022 (Checherita-Westphal et al, 2022) Figure C1 presents the results of impulse responses estimated for the period 2005Q3-2017Q4 before the 2018 revision of the EU ETS Directive. I find that an exogenous increase in the EUA price leads to a significant upward effect on renewable energy investment and output gap in line with Polzin et al (2015).…”

Section: Endnotesmentioning

confidence: 99%

The impact of rising EU Allowance prices on core inflation in the Eurozone

Nishigaki

2023

Economic Affairs

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This article examines the impact of EU Allowance (EUA) prices on core inflation in the Eurozone between 2005 and 2022. The empirical results suggest that a positive shock to the EUA price led to higher long-run inflation expectations and core inflation. This implies that the rise in EUA prices can be passed on to consumers and enterprises, leading to an increase in production costs and consumer prices. And, while a positive shock to EUA prices may promote investment in renewable energy in the short term, the impact is not statistically significant and does not last long. The results suggest considerable potential for European policymakers to re-examine policy mechanisms to accelerate renewable energy investment and maintain price stability in the medium term.

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Section: Endnotesmentioning

confidence: 99%

The impact of rising EU Allowance prices on core inflation in the Eurozone

Nishigaki

2023

Economic Affairs

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“…3 Previous calculations put forward by Checherita-Westphal, Freir and Muggenthaler (2022) for the euro area up to June point to a slightly lower degree of targeting. In particular, these figures suggest that 12% of the measures approved seem to have targeted low-income households, while 54% represented non-targeted support for households.…”

Section: Introductionmentioning

confidence: 98%

Support measures in the face of the energy crisis and the rise in inflation: an analysis of the cost and distributional effects of some of the measures rolled out based on their degree of targeting

García-Miralles

2023

Economic Bulletin

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Rationale A variety of policy measures have been put in place in recent months to support households and firms through the upswing in prices. Analysing the design of these measures, as well as their distributional and budgetary impact, is crucial in any economic context, but even more so at the current juncture, characterised by the presence of fiscal imbalances. Takeaways •Most of the fiscal measures recently implemented in Spain to tackle the energy crisis and surging prices are largely non-targeted measures, rather than measures targeted at the most vulnerable households and firms. •According to calculations, the reductions in VAT on basic foodstuffs and on electricity and gas resulted in greater savings for low-income households as a percentage of their total expenditure, while the fuel subsidy may have benefited high-income households relatively more. •Alternative measures targeting vulnerable households based on their income could provide protection at a level that is comparable to the actual measures but at a lower cost and without distorting price signals.

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