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The Macroeconomic and Redistributive Effects of Shielding Consumers from Rising Energy Prices: a Real Time Evaluation of the French Experiment

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Listed:
  • François Langot

    (GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPREMAP - Centre pour la recherche économique et ses applications - ECO ENS-PSL - Département d'économie de l'ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres)

  • Selma Malmberg

    (CEPREMAP - Centre pour la recherche économique et ses applications - ECO ENS-PSL - Département d'économie de l'ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres, GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université)

  • Fabien Tripier

    (CEPREMAP - Centre pour la recherche économique et ses applications - ECO ENS-PSL - Département d'économie de l'ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres, LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique)

  • Jean-Olivier Hairault

    (CEPREMAP - Centre pour la recherche économique et ses applications - ECO ENS-PSL - Département d'économie de l'ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

The French government has implemented a tariff shield on energy products to dampen the impact of the increase in energy prices started in 2021. To assess the macroeconomic and redistributive effects of this policies, we propose a new methodology for ex-ante evaluations, based on the government forecasts embedded in the Finance Act and on a new-Keynesian business cycle model with heterogeneous agents. From a macroeconomic perspective, this policy supports economic growth and curbs inflation, but slightly rises the debt-to-GDP ratio. In terms of redistribution, this policy contains the rise in consumption inequalities. We compare the effects of this policy with alternative policies such as a re-indexation of wages on prices or a redistributive policy targeted at the most vulnerable households.

Suggested Citation

  • François Langot & Selma Malmberg & Fabien Tripier & Jean-Olivier Hairault, 2023. "The Macroeconomic and Redistributive Effects of Shielding Consumers from Rising Energy Prices: a Real Time Evaluation of the French Experiment ," Working Papers hal-04204685, HAL.
    • Handle: RePEc:hal:wpaper:hal-04204685
    Note: View the original document on HAL open archive server: https://hal.science/hal-04204685
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