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The article uses a demand-constrained small-open-economy model in the tradition of Keynes and Kalecki to study the effects of offshoring on aggregate demand and domestic employment. Offshoring is represented as labor-saving import-using technical change. The results depend on the behavior of the markup on unit costs. If higher markups absorb the competitiveness gain, the scale effect of labor demand is negative, and offshoring unambiguously reduces domestic demand and employment. If the markup remains constant, the net effect of offshoring on domestic demand and employment is ambiguous; it depends crucially on the price elasticity of exports. [ABSTRACT FROM AUTHOR]

The high level of nitrogen emissions over the last decades and their adverse impact on the natural environment and human health are a pressing environmental issue. A nitrogen tax can be a cost-efficient and effective policy instrument to reduce nitrogen emissions. However, adverse effects on low- and middle-income households might lead to societal and political frictions that could end up in resistance. In this paper we investigate how a hypothetical nitrogen tax covering the specific external costs of nitrogen could be implemented and estimate its short-term distributional effects on household income groups in Germany. The findings show that the proposed tax would be regressive. However, if the tax rate is set equal to the true cost of nitrogen, the monetary impacts would overall be small, ranging from 1.15% of income for the first income quintile to 0.66% for the fifth. Complementary policy measures to lower the burden on low-income households, farmers and the energy sector could preempt social resistance against the tax. [ABSTRACT FROM AUTHOR]