The Price of Delay: Supply Chain Disruptions and Pricing Dynamics

Salomé Baslandze () and Simon Fuchs

No 2025-8, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: We study the role of supply chain disruptions in shaping consumer prices, focusing on both firms' own import shocks and strategic responses to competitors' disruptions. Using a newly constructed microlevel dataset that links transaction-level US import data from bills of lading with high-frequency consumer prices and sales from a consumer panel, we develop a novel approach to estimate the price effects of cost shocks and product availability. Motivated by a model of delivery delays, cost shocks, and firm pricing, we implement a shift-share identification strategy based on delivery shortfalls, port congestion, and freight and import costs. We find sizable pass-through elasticities: firms raise prices in response to higher import costs and delivery delays, especially when disruptions persist. We also identify strategic pricing: firms—including non-importers—increase prices in response to competitors' supply chain disruptions. Using our estimates and back-of-the-envelope calculations from the model, we show that strategic interactions significantly amplified the direct effects of supply chain shocks on consumer prices during the pandemic.

Keywords: supply chains; inflation; delivery delays; strategic interactions; pass-through; inventory (search for similar items in EconPapers)
JEL-codes: E31 F14 (search for similar items in EconPapers)
Pages: 61
Date: 2025-09-24
New Economics Papers: this item is included in nep-bec, nep-eur, nep-mon and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in 2025

Downloads: (external link)
https://www.atlantafed.org/-/media/documents/resea ... pricing-dynamics.pdf (application/pdf)

Related works:
Working Paper: The Price of Delay: Supply Chain Disruptions and Pricing Dynamics (2025)
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:fip:fedawp:101962

Ordering information: This working paper can be ordered from

DOI: 10.29338/wp2025-08

Access Statistics for this paper

More papers in FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta Contact information at EDIRC.
Bibliographic data for series maintained by Rob Sarwark ().