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Impact of supply chain pressure on macroeconomy and stock returns – Evidence from US aggregate and sectoral markets

Author

Listed:
  • Huimin Li

    (West Chester University of Pennsylvania)

  • Dazhi Zheng

    (West Chester University of Pennsylvania)

  • Xiaowei Zhu

    (West Chester University of Pennsylvania)

Abstract

This study examines the impact of supply chain pressure on macroeconomic variables and stock returns in the U.S. from January 1998 to February 2022, after controlling for monetary policy uncertainty and oil price shock. It is found that change in supply chain pressure has a positive impact on inflation and aggregate stock return and a negative impact on change in industrial output. With respect to the sectoral returns, evidence shows that change in supply chain pressure usually has a positive impact on Basic materials, Consumer staples, Industrials, and Real estate returns. However, during the Covid-19 pandemic, change in supply chain pressure has a significant and negative impact on industrial output and stock return.

Suggested Citation

  • Huimin Li & Dazhi Zheng & Xiaowei Zhu, 2025. "Impact of supply chain pressure on macroeconomy and stock returns – Evidence from US aggregate and sectoral markets," Economics Bulletin, AccessEcon, vol. 45(1), pages 370-383.
    • Handle: RePEc:ebl:ecbull:eb-24-00008
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    References listed on IDEAS

    as
    1. Cologni, Alessandro & Manera, Matteo, 2008. "Oil prices, inflation and interest rates in a structural cointegrated VAR model for the G-7 countries," Energy Economics, Elsevier, vol. 30(3), pages 856-888, May.
    2. Boudoukh, Jacob & Richardson, Matthew, 1993. "Stock Returns and Inflation: A Long-Horizon Perspective," American Economic Review, American Economic Association, vol. 83(5), pages 1346-1355, December.
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    More about this item

    Keywords

    Supply chain pressure; sectoral stock returns; monetary policy uncertainty; oil price shock;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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