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Navigating the Waves of Global Shipping: Drivers and Aggregate Implications

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Abstract

This paper studies the drivers of global shipping dynamics and their aggregate implications. We document novel evidence on the dynamics of global shipping supply, demand, and costs. Motivated by this evidence, we set up a dynamic model of international trade with a global shipping market where shipping firms and importers endogenously determine shipping supply and costs. We find the model successfully accounts for the dynamics of global shipping observed in the aftermath of COVID-19, at business cycle frequencies, and following shipping disruptions in the Red Sea. Accounting for global shipping is critical for the dynamics of aggregate economic activity.

Suggested Citation

  • Jason Dunn & Fernando Leibovici, 2023. "Navigating the Waves of Global Shipping: Drivers and Aggregate Implications," Working Papers 2023-002, Federal Reserve Bank of St. Louis, revised Aug 2024.
    • Handle: RePEc:fip:fedlwp:95708
    DOI: 10.20955/wp.2023.002
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    More about this item

    Keywords

    international shipping; international trade; shipping supply; shipping demand; shipping prices;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General

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