What can stockouts tell us about inflation? Evidence from online micro data

Alberto Cavallo and Oleksiy Kryvtsov

Journal of International Economics, 2023, vol. 146, issue C

Abstract: We use a detailed micro dataset on product availability and stockouts to construct a direct high-frequency measure of consumer product shortages during the 2020–2022 pandemic. We document a widespread multi-fold rise in stockouts in nearly all sectors early in the pandemic. Over time, the composition evolved from temporary to more permanently discontinued products, concentrated in fewer sectors. We show that unexpected shocks to stockout levels have significant inflationary effects within three months. These effects are larger and more persistent for imported goods and import-intensive sectors. We develop a model of inventories in a sector facing both demand and cost disturbances, and use the observed joint dynamics of stockouts and prices to show that these effects can be associated with elevated costs of replenishing inventories and higher exposure to trade.

Keywords: Prices; Stockouts; Inventories; Supply disruptions; COVID-19 pandemic (search for similar items in EconPapers)
JEL-codes: D22 E31 E37 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Chapter: What Can Stockouts Tell Us About Inflation? Evidence from Online Micro Data (2022)
Working Paper: What Can Stockouts Tell Us About Inflation? Evidence from Online Micro Data (2021)
Working Paper: What Can Stockouts Tell Us About Inflation? Evidence from Online Micro Data (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:146:y:2023:i:c:s0022199623000557

DOI: 10.1016/j.jinteco.2023.103769

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