Global Supply Chain Disruptions and Inflation During the COVID-19 Pandemic


We investigate the role supply chain disruptions during the COVID-19 pandemic played in U.S. producer price index (PPI) inflation. We exploit pre-pandemic cross-industry variation in sourcing patterns across countries and interact it with measures of international supply chain bottlenecks during the pandemic. We show that exposure to global supply chain disruptions played a significant role in U.S. cross-industry PPI inflation between January and November 2021. If bottlenecks had followed the same path as in 2019, PPI inflation in the manufacturing sector would have been 2 percentage points lower in January 2021 and 20 percentage points lower in November 2021.

Federal Reserve Bank of St. Louis Review
Jesse LaBelle
Jesse LaBelle
First-Year Economics PhD Student

Jesse LaBelle is a first-year PhD student in the Northwestern University Economics Department.