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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.

France --- Macroeconomics --- Economics: General --- Taxation and Subsidies: Externalities --- Redistributive Effects --- Environmental Taxes and Subsidies --- Fiscal Policies and Behavior of Economic Agents: Household --- Fiscal Policies and Behavior of Economic Agents: Firm --- Price Level --- Inflation --- Deflation --- Energy: Demand and Supply --- Prices --- Agriculture: Aggregate Supply and Demand Analysis --- Economic & financial crises & disasters --- Economics of specific sectors --- Energy prices --- Food prices --- Currency crises --- Informal sector --- Economics

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Reaching agreement on a reasonable performance target is a challenge, with costs associated with getting it wrong. Attention in the literature has focused on the potential negative effects of gaming or of creaming. However, even if there is no gaming or creaming taking place, there can still be costs associated with setting a level of the performance target that is either too low or too high. On the one hand, if the negotiated performance target is too low, there is a strong risk that the target would be met without any change in behavior or performance from what would have been realized without a performance management system. In that case, there would be no benefit-only the cost of covering the administrative costs associated with developing the monitoring and management systems. On the other hand, if the negotiated performance target is too high, there could also be significant costs. The exact nature of the costs depends on which one of two unattractive options the principal chooses to follow once it becomes apparent that the performance targets were set unrealistically high. If the principal chooses simply to waive any possible repercussions for the agents for not meeting the performance targets, this can undermine the credibility of the system. If the principal insists on holding agents to meeting the performance targets-no matter how unrealistic they were-this can breed resentment and adversely affect future productivity. This paper considers some approaches to target setting that have been used in the literature and proposes an approach based on the use of quantile regressions to construct a Characteristic Adjusted Performance distribution of performance to guide the selection of targets. The paper then presents two concrete examples of applications of this approach related to the setting of targets on School Test Scores and Improvement in Homicide rates in Police Districts in the State of Minas Gerais, Brazil.

Behavior of Economic Agents --- E-Business --- Education for All --- Educational Sciences --- Government Performance --- Macroeconomics and Economic Growth --- Minas Gerais --- Poverty Reduction --- Target Setting --- Teaching and Learning --- Tertiary Education --- Brazil --- Latin America

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This paper examines the role of tax policy reforms in enhancing fiscal shock smoothing in a panel of 13 OECD economies during the period 1980-2017. The results suggest that tax reforms, in particular those that broaden the tax base, significantly enhance the ability of fiscal policy to mitigate the impact of growth shocks on disposable income. We find that the magnitude of shock smoothing increases from an average of 2 percent to 3-3½ percent following the reform. The effects are considerably higher for tax base than tax rate changes, and also higher for indirect tax than direct tax changes. The effects are symmetric—that is, the increase in shock smoothing following a reform expanding the tax base (rate) is similar to the decline in shock smoothing after a reform narrowing the tax base (rate). Tax elasticity, collection efficiency, and the progressivity of the tax system are important channels through which tax reforms affect fiscal stabilization.

Fiscal policy. --- Tax policy --- Taxation --- Economic policy --- Finance, Public --- Government policy --- Personal Finance -Taxation --- Public Finance --- Fiscal Policies and Behavior of Economic Agents: General --- Fiscal Policies and Behavior of Economic Agents: Firm --- Fiscal Policy --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Business Taxes and Subsidies --- Public finance & taxation --- Macroeconomics --- Fiscal policy --- Income and capital gains taxes --- Consumption taxes --- Personal income tax --- Value-added tax --- Income tax --- Spendings tax

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The 1980s trends were to lower marginal personal income tax rates, scale down rate structures, and apply the highest rate at lower levels of per capita GDP. In the 1990s, driven by fiscal deficits and unemployment, and difficulty in linking high marginal rates to low incentives or revenue productivity, tax authorities are again demonstrating an interest in increasing marginal rates. This will burden those that are correctly paying the tax. Instead, equity and revenue productivity should be improved through minimum taxes, presumptive taxes, adequate inclusion of capital income in the tax base, revitalization of property taxes, and selected luxury taxes.

Macroeconomics --- Personal Finance -Taxation --- Taxation --- Fiscal Policies and Behavior of Economic Agents: General --- Fiscal Policies and Behavior of Economic Agents: Household --- Economic History: Government, War, Law, and Regulation: General, International, or Comparative --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Taxation, Subsidies, and Revenue: General --- Personal Income, Wealth, and Their Distributions --- Public finance & taxation --- Income and capital gains taxes --- Income tax systems --- Personal income tax --- Personal income --- Tax incentives --- Taxes --- National accounts --- Tax equity --- Tax policy --- Income tax --- Income --- Tax administration and procedure --- United States

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This paper evaluates policy alternatives to achieve permanent fiscal consolidation in Hungary, based on a general equilibrium calibration. The main finding is that the composition of the consolidation, as determined by the mix of revenue and expenditure measures, has important implications for growth, employment, investment, and other key macroeconomic variables. A reduction in current expenditures yields the smallest GDP contraction in the short term and can increase output in the long term by stimulating labor participation and private investment. On the other end of the spectrum, a consolidation of government investment and corporate taxes are the most costly, as disincentives for private investment result in protracted declines in GDP that compound over time to GDP losses that are multiple times the initial size of the consolidation.

Fiscal policy --- Tax policy --- Taxation --- Economic policy --- Finance, Public --- Government policy --- Macroeconomics --- Public Finance --- Forecasting and Simulation: Models and Applications --- Fiscal Policy --- Efficiency --- Optimal Taxation --- Fiscal Policies and Behavior of Economic Agents: General --- Fiscal Policies and Behavior of Economic Agents: Other --- National Government Expenditures and Related Policies: General --- Debt --- Debt Management --- Sovereign Debt --- Macroeconomics: Consumption --- Saving --- Wealth --- Labor Economics: General --- Public finance & taxation --- Labour --- income economics --- Fiscal consolidation --- Consumption --- Public debt --- Labor --- Government consumption --- National accounts --- Economics --- Debts, Public --- Labor economics --- Hungary --- Income economics