Working Paper Revision

Navigating the Waves of Global Shipping: Drivers and Aggregate Implications


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.

Keywords: international shipping; international trade; shipping supply; shipping demand; shipping prices;

JEL Classification: F1; F41; L91;

https://doi.org/10.20955/wp.2023.002

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Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 2024-08

Number: 2023-002

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