Search Results
Showing results 1 to 10 of approximately 15.
(refine search)
Journal Article
Global Supply Chain Disruptions Can Be Seen Anywhere, but Their Costs Are Not the Same Everywhere
Although ubiquitous, supply chain challenges are exerting more cost pressures on the types of businessesconcentrated in the Tenth Federal Reserve District. Businesses in the region are less willing or able to adjustthe amount of imported goods they purchase even when procurement prices rise precipitously, as they have over the past year.
Discussion Paper
Are Recession Fears Replacing Supply Chain Challenges? Evidence from Fifth District Business Surveys
The last year and a half have been fraught with persistent supply chain challenges, the highest rate of inflation since the 1980s, and record levels of job openings and quits. As such, it is not surprising that in the Richmond Fed's May monthly business surveys, the top three concerns across all Fifth District firms surveyed were inflation, supply chain disruptions, and availability of labor. This was corroborated by national data collected as part of the second quarter release of the Richmond Fed's CFO Survey.
Discussion Paper
The Layers of Inflation Persistence
In a recent post, we introduced the Multivariate Core Trend (MTC), a measure of inflation persistence in the core sectors of the personal consumption expenditure (PCE) price index. With data up to February 2022, we used the MCT to interpret the nature of post-pandemic price spikes, arguing that inflation dynamics were dominated by a persistent component largely common across sectors, which we estimated at around 5 percent. Indeed, over the year, inflation proved to be persistent and broad based, and core PCE inflation is likely to end 2022 near 5 percent. So, what is the MCT telling us today? ...
Working Paper
The Channels of International Comovement
How does exposure to international markets affect returns and cash flow comovements? Foreign bond owners, lenders, affiliates, investors, customers, and suppliers all transmit country shocks to companies. Most multinationals have many of these exposures simultaneously within the same foreign market. Returns and cash flows of two companies comove when exposed to the same country through the same channel. Within-country exposure through different channels is generally associated with lower comovement, in line with an operational hedging strategy. This evidence can help reconcile how, on ...
Journal Article
How Has the Current Lockdown in China Affected the Global Supply Chain?
The recent lockdown in China is expected to exacerbate disruptions in the global supply chain. Using high-frequency data, I show that supply chain disruptions from the current lockdown are likely to be less severe than those from the lockdown in 2020. However, highly transmissible COVID-19 variants continue to present risks, and supply chain disruptions could intensify if the current lockdown is extended or applied to other regions of China.
Discussion Paper
Trade Policy Uncertainty May Affect the Organization of Firms’ Supply Chains
Global trade policy uncertainty has increased significantly, largely because of a changing tariff regime between the United States and China. In this blog post, we argue that trade policy can have a significant effect on firms? organization of supply chains. When the probability of a trade war rises, firms become less likely to form long-term, just-in-time relationships with foreign suppliers, which may lead to higher costs and welfare losses for consumers. Our research shows that even in the absence of actual tariff changes, an increased likelihood of a trade war can significantly distort ...
Briefing
What Makes Supply Chains More Resilient to Economic Shocks?
The recent supply chain disruptions caused by COVID-19 lockdowns highlighted the importance of understanding supply chain resilience, which is the extent to which supply chains can resist, adapt to and recover from a sudden economic shock. We analyze the various COVID-19 lockdowns across India to understand which supply chains were more resilient to the lockdown disruptions. Firms that bought more complex products and that transacted with fewer and more important suppliers proved to be more resilient by maintaining buyer-supplier relationships through the lockdowns and exhibiting smaller ...
Discussion Paper
What's Behind Firms' Reported Improvements in Meeting Demand?
According to special question results from our most recent monthly business survey, Fifth District firms reported improvement in their ability to meet customer demand compared to earlier in the year. Moreover, the majority of respondents said they expect to fully meet customer demand in the next 12 months. Although firms have continued to take action to boost production, softening demand itself may be another reason for the reported improvements.
Journal Article
The Impacts of Supply Chain Disruptions on Inflation
Since early 2021, inflation has consistently exceeded the Federal Reserve’s target of 2 percent. Using a combination of data, economic theory, and narrative information around historical events, we empirically assess what has caused persistently elevated inflation. Our estimates suggest that both aggregate demand and supply factors, including supply chain disruptions, have contributed significantly to high inflation.
Comparing Value-Added Trade and Gross Trade
Which one provides a more accurate picture of global trade? And what does the U.S. trade balance with several major trading partners look like for the two measures?