Global drivers of inflation: The role of supply chain disruptions and commodity price shocks

Elena Maria Diaz, Juncal Cunado and Fernando Perez de Gracia

Economic Modelling, 2024, vol. 140, issue C

Abstract: The determinants of inflation rates have been extensively studied with no clear consensus. Recent research highlights the growing influence of global supply factors, notably supply chain disruptions and commodity price shocks. This paper analyzes the changing impact of these global supply chain disruptions and commodity price shocks, compared to demand shocks, on inflation rates in Germany, Japan, the U.K., and the U.S. from 1998 to 2022. The findings reveal that since the mid-2010s, supply shocks have become the predominant drivers of inflation. After the Global Financial Crisis, commodity price shocks significantly affected inflation in Germany, the U.K., and the U.S., while the influence of global supply chain disruptions on inflation in all four countries surged following the COVID-19 pandemic.

Keywords: Supply chain disruptions; Commodity price shocks; Inflation rates; SVAR model (search for similar items in EconPapers)
JEL-codes: E32 E37 F47 F62 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:140:y:2024:i:c:s0264999324002177

DOI: 10.1016/j.econmod.2024.106860

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