Measuring Shortages since 1900

Dario Caldara, Matteo Iacoviello and David Yu

No 20304, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper introduces a monthly shortage index spanning 1900 to the present, constructed from 25 million newspaper articles. The index captures shortages across industry, labor, food, and energy, and spikes during economic crises and wars. We validate the index and show that it provides information beyond traditional macroeconomic indicators. Using predictive regressions, we find that shortages are associated with persistently high inflation and lower economic activity. A structural VAR model reveals that, compared to a traditional supply shock, surprise movements in shortages produce less inflation relative to their GDP impact, suggesting that shortages are associated with constraints on price adjustment that limit inflation but magnify the decline in real activity. We also show that post-pandemic shortages and inflation were primarily driven by supply forces, with demand factors playing a less important role.

Keywords: Inflation (search for similar items in EconPapers)
JEL-codes: C55 E31 N10 (search for similar items in EconPapers)
Date: 2025-05
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP20304 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:20304

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP20304

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().