The macroeconomic effects of global supply chain disruptions

  • Highly interconnected global supply chains make countries vulnerable to supply chain disruptions. The authors estimate the macroeconomic effects of global supply chain shocks for the euro area. Their empirical model combines business cycle variables with data from international container trade. Using a novel identification scheme, they augment conventional sign restrictions on the impulse responses by narrative information about three episodes: the Tohoku earthquake in 2011, the Suez Canal obstruction in 2021, and the Shanghai backlog in 2022. They show that a global supply chain shock causes a drop in euro area real economic activity and a strong increase in consumer prices. Over a horizon of one year, the global supply chain shock explains about 30% of inflation dynamics. They also use regional data on supply chain pressure to isolate shocks originating in China. Their results show that supply chain disruptions originating in China are an important driver for unexpected movements in industrial production, while disruptions originating outside China are an especially important driver for the dynamics of consumer prices.

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Author:David FinckGND, Peter TillmannORCiDGND
URN:urn:nbn:de:hebis:30:3-691800
URL:https://www.imfs-frankfurt.de/de/forschung/imfs-working-papers/details/mm_publication/detail/publication/the-macroeconomic-effects-of-global-supply-chain-disruptions.html
Parent Title (German):Working paper series / Institute for Monetary and Financial Stability ; 178
Series (Serial Number):Working paper series / Institute for Monetary and Financial Stability (178)
Publisher:Johann Wolfgang Goethe-Univ., Inst. for Monetary and Financial Stability
Place of publication:Frankfurt am Main
Document Type:Working Paper
Language:English
Year of Completion:2023
Year of first Publication:2023
Publishing Institution:Universit├Ątsbibliothek Johann Christian Senckenberg
Release Date:2023/01/13
Tag:Container Trade; Inflation; Narrative Identification; Sign Restrictions; Supply Chain
Edition:January 2, 2023
Page Number:52
Note:
JEL-Klassifikation:
F International Economics / F6 Economic Impacts of Globalization / F62 Macroeconomic Impacts
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / Institute for Monetary and Financial Stability (IMFS)
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
JEL-Classification:E Macroeconomics and Monetary Economics / E3 Prices, Business Fluctuations, and Cycles / E32 Business Fluctuations; Cycles
F International Economics / F1 Trade / F14 Country and Industry Studies of Trade
Sammlungen:Universit├Ątspublikationen
Licence (German):License LogoDeutsches Urheberrecht