Supply Chain Resilience and Economic Growth: Evidence from Global Shipping Disruptions

Grant description:

This project aims to provide new causal evidence on the economic implications of
supply chain disruptions. The identification strategy leverages the fact that global supply chains rely on maritime trade, which depends on a few critical choke points. The author will identify disruptive incidents, which are plausibly exogenous to the U.S. economy, and then isolate the market impact of the disruption using high-frequency financial data. The author will then use these shipping cost surprises as an instrument in a structural VAR model of the U.S. economy to identify a structural supply chain shock.