Abstract
Living costs in Germany have surged since Russia’s attack on Ukraine. In this article, we discuss pros and cons of different government policies to protect affected citizens. There is a vast domain of possible relief options, each coming with its own trade-offs and design pitfalls. Information gaps in German public administration render desirable options like income and energy-use-contingent transfers administratively infeasible. These frictions should be addressed — if not for the present, then for the next crisis. With regard to other options, governments must be mindful to design policies that are well-targeted to people in need and that do not distort incentives to reduce energy consumption. Possibilities for that do exist.
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Prof. Dr. Nadine Riedel ist Direktorin des Instituts für Wirtschaftspolitik und Regionalökonomik an der Westfälischen Wilhelms-Universität Münster.
Prof. Dr. Andreas Peichl ist Leiter des ifo Zentrums für Makroökonomik und Befragungen und Professor für Volkswirtschaftslehre, insbesondere Makroökonomie und Finanzwissenschaft, an der Ludwig-MaximiliansUniversität München.
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Open Access: Dieser Artikel wird unter der Creative Commons Namensnennung 4.0 International Lizenz veröffentlicht (https://creativecommons.org/licenses/by/4.0/deed.de).
Open Access wird durch die ZBW — Leibniz-Informationszentrum Wirtschaft gefördert.