A top-down microsimulation analysis: linking FIDELIO and JRC-GEM-E3/AGLINK-COSIMO with EUROMOD

This note examines how a prolonged energy price shock following the conflict in the Middle East could affect EU households across the income distribution. It extends our previous analysis of the most recent inflation surge, which focused on the immediate effect of higher transport fuel prices (De Agostini et al., 2026), by considering the wider price pressures likely to emerge over the coming months as rising fuel costs pass through to electricity, heating, food, and other goods, particularly if oil and gas prices remain elevated beyond the official forecast. To do so, we bring together, for the first time, four models in a single framework: building on the scenarios of the European Commission Global Multicountry (GM) model, we translate its EU-wide estimates into detailed sectoral price changes using FIDELIO and JRC-GEM-E3 / AGLINK-COSIMO, and feed these price changes into EUROMOD to trace their effect on household budgets. The results show that the price shock is regressive: lower income households face higher price increases and devote a larger share of their income to the goods most affected, so the burden falls disproportionately on them, and more so the longer the shock persists. While the note presents results at population-weighted EU averages, it is important to notice that impacts at Member State level can differ significantly depending on national consumption and energy patterns.

DE AGOSTINI Paola;  TRZCINSKI Kajetan;  KLENERT David;  AMORES Antonio F;  PEDAUGA Luis;  WEITZEL Matthias;  FERREIRA Valeria;  GARAFFA Rafael;  KREITMAIR Nicolas;  PIERALLI Simone;  ARSOV Spire;  ELLEBY Christian; 

2026-07-09

European Commission

JRC147531

https://publications.jrc.ec.europa.eu/repository/handle/JRC147531,