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Rigidities in Transportation and Supply Chain Disruptions

Author

Listed:
  • Giulia Brancaccio
  • Myrto Kalouptsidi
  • Theodore Papageorgiou

Abstract

In this paper, we provide a simple and intuitive story for supply chain disruptions driven by the rigidities in the transportation sector. Focusing on maritime shipping, we argue that the frequent macroeconomic shocks that shape demand for transportation meet a highly inelastic supply curve for transportation services. The steepness is driven by equilibrium bottlenecks in ships (transportation agents) and ports (transportation infrastructure). This leads to highly volatile shipping prices and port congestion, affecting importers and exporters worldwide. We discuss how both global trade and inflation react to these costs so that disruptions pass through to the entire economy.

Suggested Citation

  • Giulia Brancaccio & Myrto Kalouptsidi & Theodore Papageorgiou, 2025. "Rigidities in Transportation and Supply Chain Disruptions," AEA Papers and Proceedings, American Economic Association, vol. 115, pages 543-550, May.
    • Handle: RePEc:aea:apandp:v:115:y:2025:p:543-50
    DOI: 10.1257/pandp.20251079
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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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