6min chapter

Odd Lots cover image

Isabella Weber On Germany's Plan to Cap the Price of Gas

Odd Lots

CHAPTER

What Are the Differences Between a Price Cap and a Win for Profit Tax?

In Europe, and as by now, also fellow economists like Paul Krugman and Joe Stiglitz have been arguing the energy crisis is so severe that various forms of price caps in the energy sector are of course on the table. But I'm actually thinking of these two policies as being complimentary along the value chain. So here then, there could be a situation where an energy price cap could be complementary with a windfall profit tax - which wouldn't even really be a tax. In this kind of scenario, you would actually haveactually a complementarity between a price cap on energy as an important input and a conditionality for access to subsidized gas.

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