Many countries have used energy subsidies to cushion the effects of high energy prices onhouseholds and fims. After documenting the transmission of oil supply shocks empirically in the United Statesand the Euro Area, we use a New Kevnesian modeling framework to study the conditions under which thesepolicies can curb infation. We first consider a closed economy model to show that a consumer subsidy may becounterproductive, especially as an inflation-fighting tool, when applied globally or in a se
关注微信
