Import Constraints

Diego Comin, Robert Johnson and Callum Jones

No 32072, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: During the recovery from the COVID-19 pandemic, international shipping and logistics capacity was strained, limiting the quantity of imports. We investigate the impact of an import constraint on inflation, following an increase in domestic demand. Whether the binding import constraint raises inflation depends on how it affects trade intermediation costs. If the binding constraint raises trade costs, then import price inflation also increases. In this case, however, foreign producer price inflation falls, and import quantities rise more for inputs than final goods. Both these model results appear counterfactual, which suggests that import constraints may not explain observed import price inflation.

JEL-codes: E31 F1 F40 (search for similar items in EconPapers)
Date: 2024-01
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Published as Diego Comin & Robert C. Johnson & Callum Jones, 2024. "Import Constraints," AEA Papers and Proceedings, vol 114, pages 118-123.

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