Policy Responses to High Energy and Food Prices

By David Amaglobeli, Mengfei Gu, Emine Hanedar, Gee Hee Hong, Celine Thevenot

March 24, 2023

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Format: Chicago

David Amaglobeli, Mengfei Gu, Emine Hanedar, Gee Hee Hong, and Celine Thevenot. Policy Responses to High Energy and Food Prices, (USA: International Monetary Fund, 2023) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The surge in energy and food prices, which was amplified by Russia’s invasion of Ukraine, has prompted a flurry of policy responses by countries during 2022. The aim of these policy responses was to mitigate social and economic impact of higher prices. In this paper we document announcements of policy measures based on the Database of Energy and Food Price Actions (DEFPA), which was developed based on two rounds of survey responses of IMF country teams conducted in March/April and June/July of 2022. The paper also provides discussion on policy trade-offs when considering appropriate policy responses both for countries with strong and weak social safety nets. Key policy message is that providing targeted support to households in the form of cash transfers is the most cost-effective way of alleviating the burden on vulnerable households and have to be preferred over broad-based mechanisms that prevent international prices to pass through to domestic consumers.

Subject: Energy prices, Food prices, Prices

Keywords: A. pass-through, Cost of living, Demand and supply response, Energy prices, Food Prices, IMF country team, Policy measure, Social policy

Publication Details

Pages:

70
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2023/074
Stock No:

WPIEA2023074
ISBN:

9798400237768
ISSN:

1018-5941

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