The aggregate effects of global and local supply chain disruptions: 2020–2022

George Alessandria, Shafaat Khan, Armen Khederlarian, Carter Mix and Kim Ruhl

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

Abstract: We study the aggregate effects of supply-chain disruptions in the post-pandemic period in a heterogeneous-firm, general equilibrium model with input-output linkages and a rich set of supply chain frictions: uncertain shipping delays, fixed order costs, and storage costs. Firms optimally hold inventories that depend on the source of supply, domestic or imported. Increases in shipping times are contractionary, raise prices, and increase stockouts, particularly for goods intensive in delayed inputs. These effects are larger when inventories are already at low levels. We fit the model to the U.S. and global economies from 2020 to 2022 and estimate large aggregate effects of supply disruptions. Our model predicts that the boost in output from reducing delays will be smaller than the contraction from the waning effects of stimulus.

Keywords: Supply chain; Shipping delays; COVID (search for similar items in EconPapers)
JEL-codes: F11 F17 F41 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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Related works:
Working Paper: The Aggregate Effects of Global and Local Supply Chain Disruptions: 2020–2022 (2023)
Working Paper: The Aggregate Effects of Global and Local Supply Chain Disruptions: 2020–2022 (2023)
Chapter: The Aggregate Effects of Global and Local Supply Chain Disruptions: 2020–2022 (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:146:y:2023:i:c:s0022199623000740

DOI: 10.1016/j.jinteco.2023.103788

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