From delayed ships to rising prices: the role of supply chain disruptions
Yang Jiao, Ting Lan,Yang Liu, and Xinrui Zhao, in this paper are addressing the question of whether the inflationary surge in the US of 2021–2022 can be causally attributed to port-level congestion shocks, as distinct from demand-side stimulus or other supply shocks like tariffs.
The authors combine three novel datasets to identify the causal effect of shipping delays on US consumer prices:
- AIS maritime traffic data: using real-time transponder signals from cargo vessels, the authors construct port-to-port travel times for 93 US mainland seaports from January 2017 to July 2023, building on a machine-learning methodology to reconstruct voyages
- Granular port-level trade data (USATradeOnline): monthly import values at the HS6-digit product level disaggregated by port
- BLS item-level CPI data: 99 goods categories at monthly frequency
The key identification strategy exploits cross-product variation in port exposure: different products enter the US through systematically different ports (e.g., footwear is concentrated on the West Coast, textiles are more dispersed), while congestion severity varied across ports and over time. This variation allows the authors to isolate the causal effect of shipping delays from confounding demand and supply shocks.
Findings
- Static effect: A 100-hour shipping delay raises consumer goods inflation by around 1.2 percentage points on average.
- Dynamic (peak) effect: The price response peaks at 0.5 percentage points around five months after the shock, then gradually tapers off.
- Domestic consumer inflation peaked at roughly 15% in mid-2022, while import price inflation remained much more muted at 3%, suggesting that delays, rather than import prices alone, were the primary transmission channel.
- Results are robust to excluding oil products and controlling for product-level supply and demand shocks.
From Ports to Prices: The Inflationary Effects of Global Supply Chain Disruptions
Authors: Yang Jiao, Ting Lan, Yang Liu, Xinrui Zhao
From: IMF
Supply chain pressure, inflation dynamics, and product-level vulnerabilities in the Euro Area
How do global supply chain disruptions transmit into inflation and economic volatility in Europe, which specific products and sectors create the greatest vulnerability to future disruptions, and what does this imply for ECB monetary policy and EU industrial policy? This is the question Bonham et al. are answering in this paper.
The authors take two complementary approaches:
Macroeconomic effects:
- Use the NY Fed’s Global Supply Chain Pressure Index (GSCPI) as the aggregate measure of supply chain stress
- Identify supply chain shocks through a Bayesian VAR model with sign restrictions (shocks must simultaneously raise inflation, reduce industrial production, and increase the GSCPI) and narrative restrictions anchored to known historical events: Tōhoku earthquake, COVID-19, Suez Canal obstruction, and Shanghai port backlog
- Estimate dynamic effects on inflation, wages, and expectations using local projection models, allowing for non-linearities
Product-level vulnerability mapping:
- Use granular HS6-digit trade data (5,600 products) to flag products with highly concentrated global production outside the EU
- Compile a list of 155 critical goods and technologies across defense, energy transition, digital infrastructure, and health sectors
- Trace multi-tier upstream supply chain dependencies using AIPNET, an AI-generated production network, to identify which concentrated products feed into those critical goods
Findings
Macroeconomic transmission:
- Supply chain shocks produce inflation that is positive, persistent, and hump-shaped, peaking roughly two years after the shock before fading.
- Effects are non-linear: large shocks (as during COVID-19, when the GSCPI hit 2.5 standard deviations above its mean) generate disproportionately stronger and more persistent price effects.
- Energy and food prices respond most strongly; services prices are least affected, given their greater reliance on domestic inputs.
- Supply chain shocks also temporarily raise firm profits and inflation expectations push up wages, and depress industrial production, especially in capital-intensive sectors.
- Around 15% of the euro area HICP basket originates from outside the EU, compared to 10% in the US, a structural difference that explains why international supply chain shocks hit Europe harder.
Product-level vulnerabilities:
- Only 4% of all products (209 out of 5,612) are classified as vulnerable, but 78% of those are intermediate goods or raw materials, meaning disruptions cascade downstream.
- Vulnerabilities peak at 13% of products in the chemicals sector, followed by 11% in mineral products.
- China is the dominant source of vulnerability; the US is a distant second.
- Germany is best positioned to substitute domestically for 51% of manufacturing vulnerabilities, followed by Spain (19%) and Italy (17%).
- About one-third of vulnerable products remain vulnerable over a decade, suggesting a durable core warranting long-term industrial policy.
The ECB’s optimal response to supply shocks is non-linear in import dependence, and, because monetary policy is a blunt instrument for supply-side problems, reducing vulnerabilities ex ante through targeted industrial policy is far less costly than stabilizing inflation ex post.
Global supply chains and European economic vulnerabilities
Authors: Dennis Bonham, Josien Demmers, Gavin Goy, Jos de Grip, Bas Heerma van Voss, Daan de Leeuw, Camille Mehlbaum, Andra Smadu, Rixt Swierstra
From: De Nederlandsche Bank
