The Long Term Effects of Export Competition Shocks
Abstract: This paper studies how persistent trade shocks can generate long-term economic scarring through endogenous growth dynamics in a small open economy. I extend a New Keynesian endogenous growth framework with Armington trade to analyze how rising foreign competition reduces export demand, lowers expected market size, and weakens innovation incentives in tradable sectors. In the presence of nominal rigidities and labor market slack, temporary external demand shocks can therefore translate into persistent declines in productivity growth and output. Motivated by the rise of Chinese export competition and the German economy’s reliance on innovative manufacturing sectors, the framework links international trade, structural change and endogenous technological growth, while providing a setting to study the role of fiscal and industrial policy in mitigating long-run stagnation effects.
Globalized consumption undermines efficiency-driven sustainability gains across planetary boundaries
with Claudia Kemfert, Alexander Kriwoluzky, Georg Maxton and Laura Schmitz
Abstract: Despite three decades of technological progress and ambitious environmental policy, Germany's consumption has continuously exceeded planetary-boundary thresholds in six of seven environmental dimensions since 1995, with little sign of improvement over time. Combining environmentally extended multi-regional input–output tables with life-cycle impact assessment methods, we develop a consumption-based sustainability indicator across seven impact categories, benchmarked against national shares of planetary-boundary thresholds. Apparent progress in territorial production indicators largely disappears once imports and upstream supply chains are accounted for. Decomposing environmental pressures into scale and technology components reveals that foreign production exhibits systematically higher pollution intensities than domestic production across all categories. A rising scale of imported goods slows aggregate efficiency gains and offsets technological improvements altogether. These results highlight how the scale and composition of globalized consumption can systematically undermine efficiency-driven sustainability gains in open, high-income economies.
Regional Effects of Carbon-Price Shocks
with Zeno Enders
Abstract: We investigate the heterogeneity in the pass-through of carbon policies. Investigating the effects of the EU ETS cap-and-trade program, we show that regions that are directly exposed to the policy are not affected more by the higher carbon price than regions with a low exposure. Digging deeper we find that electricity prices in high-exposure regions increases less than in regions with a lower exposure after such a shock. Hinting to the fact that indirect effects, such as pass-through via higher energy prices can explain the heterogeneous responses.