Global Supply Chain Disruptions and Inflation During the COVID-19 Pandemic

We investigate the role supply chain disruptions during the COVID-19 pandemic played in U.S. producer price index (PPI) inflation. We exploit pre-pandemic cross-industry variation in sourcing patterns across countries and interact it with measures of international supply chain bottlenecks during the...

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Bibliographic Details
Published in:Review - Federal Reserve Bank of St. Louis 2022-04, Vol.104 (2), p.1-14
Main Authors: Santacreu, Ana Maria, LaBelle, Jesse
Format: Article
Language:English
Subjects:
COVID-19
Inflation
Manufacturing
Pandemics
Price indexes
Producer prices
Semiconductors
Suppliers
Supply
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Summary:We investigate the role supply chain disruptions during the COVID-19 pandemic played in U.S. producer price index (PPI) inflation. We exploit pre-pandemic cross-industry variation in sourcing patterns across countries and interact it with measures of international supply chain bottlenecks during the pandemic. We show that exposure to global supply chain disruptions played a significant role in U.S. cross-industry PPI inflation between January and November 2021. If bottlenecks had followed the same path as in 2019, PPI inflation in the manufacturing sector would have been 2 percentage points lower in January 2021 and 20 percentage points lower in November 2021. (JEL F13, F14, F44)
ISSN:0014-9187
2163-4505