How to avoid energy rationing
Politicians should pay attention to the latest economic literature
Across europe, two questions will set the political weather this winter. How high will my energy prices go? And what will the government do to protect me? Attempting to shelter from the gathering storm, French and Spanish politicians, among others, have already capped or otherwise lowered gas and electricity prices. With wholesale gas futures for early 2023 still climbing—up to more than €300 ($299) per mwh, from less than €30 last summer—and Europe’s economic indicators blinking red, more will follow suit. That prospect is enough to drive economists to despair.
This article appeared in the Finance & economics section of the print edition under the headline “Everyone has a price”
Finance & economics August 27th 2022
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