Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/311130 
Year of Publication: 
2024
Series/Report no.: 
JRC Working Papers on Taxation and Structural Reforms No. 06/2024
Publisher: 
European Commission, Joint Research Centre (JRC), Seville
Abstract: 
In response to the energy crisis, which led to high inflation, Romania, like other EU Member States, introduced a series of price-related and income-related measures to cushion the negative impact on households' welfare. Using EUROMOD and its Indirect Tax Tool extension, we assess the impact of these measures on welfare across the income distribution, while distinguishing between automatic stabilisers and discretionary measures. We find that these measures did not succeed in diminishing entirely the negative effect of the inflationary shock on the lowest-income population, given that, on the one hand, the shock was higher for low-income deciles, and, on the other hand, the policies applied were not sufficiently targeted. Against this background, the use of targeted measures is warranted in order to improve the welfare effect of such measures on lower-income households and diminish income inequalities resulting from the energy crisis.
Subjects: 
Energy supply
Shock
Inflation
Consumer price index
Low income
Social policy
Welfare analysis
Romania
Creative Commons License: 
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Document Type: 
Working Paper

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