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The Aggregate Effects of Global and Local Supply Chain Disruptions : 2020–2022

Author

Listed:
  • Alessandria,George
  • Khan,Shafaat Yar
  • Khederlarian,Armen
  • Mix,Carter
  • Ruhl,Kim J.

Abstract

This paper studies the aggregate effects of supply chain disruptions in the post-pandemicperiod in a heterogeneous-firm, general equilibrium model with input-output linkages and a rich set of supply chainfrictions: uncertain shipping delays, fixed order costs, and storage costs. Firms optimally hold inventories that dependon the source of sup- ply, domestic or imported. Increases in shipping times are contractionary, raise prices, andincrease stockouts, particularly for goods intensive in delayed inputs. These effects are larger when inventoriesare already at low levels. The paper fits the model to the United States and global economies over 2020|2022 andestimates large aggregate effects of supply disruptions. The model predicts that the boost in output from reducing delayswill be smaller than the contraction from the waning effects of stimulus.

Suggested Citation

  • Alessandria,George & Khan,Shafaat Yar & Khederlarian,Armen & Mix,Carter & Ruhl,Kim J., 2023. "The Aggregate Effects of Global and Local Supply Chain Disruptions : 2020–2022," Policy Research Working Paper Series 10303, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10303
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    Cited by:

    1. Alessandro Ferrari & Lorenzo Pesaresi, 2025. "Specialization, Complexity & Resilience in Supply Chains," Papers 2509.08981, arXiv.org.
    2. Daeyeol Chang & Niyeyesh Meimandi Nejad & Mansoureh Jeihani & Mansha Swami, 2025. "Beyond the Detour: Modeling Traffic System Shocks After the Francis Scott Key Bridge Failure," Sustainability, MDPI, vol. 17(15), pages 1-17, July.
    3. Marta Rinaldi & Mario Caterino & Stefano Riemma & Roberto Macchiaroli & Marcello Fera, 2025. "Emergency Supply Chain Resilience Enhanced Through Blockchain and Digital Twin Technology," Logistics, MDPI, vol. 9(1), pages 1-24, March.
    4. Georgieva, Vanya & Guerov, Gueorgui & Blagoeva, Nadezhda, . "Impact of economic and environmental factors on agricultural product pricing in the EU," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 10(4).
    5. Xiwen Bai & Jesús Fernández-Villaverde & Yiliang Li & Francesco Zanetti, 2024. "The Causal Effects of Global Supply Chain Disruptions on Macroeconomic Outcomes: Evidence and Theory," Economics Series Working Papers 1033, University of Oxford, Department of Economics.
    6. Alejandro G. Graziano & Yuan Tian & Alejandro Graziano, 2024. "Unpacking Global Shocks," CESifo Working Paper Series 11322, CESifo.
    7. Alejandro G. Graziano & Yuan Tian, 2023. "Trade Disruptions Along the Global Supply Chain," Working Papers 243, Red Nacional de Investigadores en Economía (RedNIE).
    8. Pablo Cuba-Borda & Jean-Paul L'Huillier, 2025. "Inflation is a Supply Phenomenon," Working Papers 137, Brandeis University, Department of Economics and International Business School.
    9. Yang, Shaopeng & Fu, Yuxi, 2025. "Interconnectedness among supply chain disruptions, energy crisis, and oil market volatility on economic resilience," Energy Economics, Elsevier, vol. 143(C).
    10. Alexandr Kopytov & Bineet Mishra & Kristoffer Nimark & Mathieu Taschereau‐Dumouchel, 2024. "Endogenous Production Networks Under Supply Chain Uncertainty," Econometrica, Econometric Society, vol. 92(5), pages 1621-1659, September.
    11. Mishra, Abhinay & Kundu, Tanmoy & Kapoor, Rohit & Goh, Mark, 2025. "Blockchain adoption in cross-border cold supply chains: Cost, Efficiency and Trust," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 201(C).
    12. Acharya, Viral & Crosignani, Matteo & Eisert, Tim & Eufinger, Christian, 2023. "How do supply shocks to inflation generalize? Evidence from the pandemic era in Europe," CEPR Discussion Papers 18530, C.E.P.R. Discussion Papers.
    13. Edouard Schaal & Mathieu Taschereau-Dumouchel, 2025. "Echoes and delays: Time-to-build in production networks," Economics Working Papers 1901, Department of Economics and Business, Universitat Pompeu Fabra.
    14. Luo, Changyuan & Wang, Ning, 2025. "U.S.-China trade frictions and supply chain reconstruction: Perspective from indirect links," Journal of International Money and Finance, Elsevier, vol. 151(C).
    15. Garcia-Revelo, José & Levieuge, Grégory & Sahuc, Jean-Guillaume, 2025. "Revisiting 15 years of unusual transatlantic monetary policies," Journal of International Money and Finance, Elsevier, vol. 159(C).
    16. Ulate, Mauricio & Vasquez, Jose P. & Zarate, Roman D., 2025. "Labor market effects of global supply chain disruptions," Journal of Monetary Economics, Elsevier, vol. 149(C).
    17. Hongyong ZHANG & Thi Thanh Ha DOAN, 2023. "Global Sourcing and Firm Inventory during the Pandemic," Discussion papers 23018, Research Institute of Economy, Trade and Industry (RIETI).
    18. Joaquín Blaum & Federico Esposito & Sebastian Heise, 2025. "Input Sourcing Under Supply Chain Risk: Evidence from U.S. Manufacturing Firms," Staff Reports 1141, Federal Reserve Bank of New York.
    19. Ernest Liu & Vladimir Smirnyagin & Aleh Tsyvinski, 2024. "Supply Chain Disruptions and Supplier Capital in U.S. Firms," Cowles Foundation Discussion Papers 2402, Cowles Foundation for Research in Economics, Yale University.
    20. Adeel Riaz & Assad Ullah & Bashir Muhammad, 2025. "The impact of global supply chain pressure on the stock market: A sectoral view," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-10, December.
    21. Mawuli Segnon & Bjorn Schulte-Tillmann & Riza Demirer & Rangan Gupta, 2025. "Deglobalization and Foreign Exchange Volatility: The Role of Supply Chain Pressures," Working Papers 202506, University of Pretoria, Department of Economics.
    22. Oscar Perello, 2025. "Trade Intermediation and Resilience in Global Sourcing," CEPREMAP Working Papers (Docweb) 2503, CEPREMAP.

    More about this item

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • F1 - International Economics - - Trade
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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