Against the background of rising inflation, a number of proposals for fiscal policy measures to dampen the increase in consumer
prices have been advanced in Austria. Generally speaking, fiscal policy cannot address the causes of inflation, but may contribute
towards offsetting its redistributive effects. It has at its disposal measures influencing public revenues (changes in taxes,
social security contributions or public charges) or expenditure (cash transfers or the provision of public services that may
serve as substitutes for market goods and services showing abnormal price increases). They often put heavy claims on budgetary
resources while mitigating only the impact of price hikes. Much more efficient is therefore policy action addressing the root
causes of inflation.
Keywords:Inflation; Fiscal policy; fiscal drag; Austria
Forschungsbereich:Makroökonomie und öffentliche Finanzen