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The Macroeconomics of Supply Chain Disruptions

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  • Daron Acemoglu
  • Alireza Tahbaz-Salehi

Abstract

This paper develops a model to study the macroeconomic implications of supply chain disruptions with three key ingredients: (i) a firm-level network of customized supplier–customer links that generate relationship-specific productivity gains; (ii) bargaining over these relationship-specific surpluses; and (iii) an extensive margin of adjustment, whereby firms decide to form or sever relations with suppliers and customers. We establish equilibrium existence and uniqueness, provide characterization results, and present a number of comparative statics that show how supply chains and aggregate output respond to shocks. We also show that equilibrium supply chains are inefficient and exhibit an inherent fragility: small shocks can lead to discontinuous changes in output, even though the efficient allocation is always continuous in the same shocks. We explore several macroeconomic implications of this fragility.

Suggested Citation

  • Daron Acemoglu & Alireza Tahbaz-Salehi, 2025. "The Macroeconomics of Supply Chain Disruptions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 92(2), pages 656-695.
    • Handle: RePEc:oup:restud:v:92:y:2025:i:2:p:656-695.
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    File URL: http://hdl.handle.net/10.1093/restud/rdae038
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    Citations

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    Cited by:

    1. Schmitz, Luuk, 2026. "Hierarchies of Adaptation: Corporate Power in Economic Statecraft," SocArXiv gwuce_v1, Center for Open Science.
    2. Lieberman, Paul & Mihov, Atanas & Naranjo, Andy & Velikov, Mihail, 2025. "Show me the receipts: B2B payment timeliness and expected returns," Journal of Financial Economics, Elsevier, vol. 172(C).
    3. Vanessa Alvariez & Michele Fioretti & Ayumu Ken Kikkawa & Monica Morlacco, 2022. "Two-Sided Market Power in Firm-to-Firm Trade," Sciences Po Economics Publications (main) hal-03795736, HAL.
    4. Vespignani, Joaquin & Smyth, Russell & Saadaoui, Jamel & Wang, Yitian, 2026. "Where Geopolitical Risk Binds: Stockpiling and AI as Complementary Strategies for Mitigating Supply Chain Risk in Critical Minerals," Working Papers 2026-01, University of Tasmania, Tasmanian School of Business and Economics.
    5. M. Sadra Heydari & Zafer Kanik & Santiago Montoya-Bland'on, 2025. "The R&D Productivity Puzzle: Innovation Networks with Heterogeneous Firms," Papers 2512.23337, arXiv.org, revised Feb 2026.
    6. De Santis, Roberto A. & Tornese, Tommaso, 2025. "Macroeconomic regime change and the size of supply chain disruption and energy supply shocks," European Economic Review, Elsevier, vol. 178(C).
    7. Joaquin Vespignani & Russell Smyth & Jamel Saadaoui, 2025. "Strategic Stockpiling Reduces the Geopolitical Risk to the Supply Chain of Copper and Lithium," CAMA Working Papers 2025-42, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.

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