Supply Chain Constraints and Inflation

Abstract

NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Monetary Policy in the Presence of Supply Constraints: Evidence from German Firm-Level Data

“…A similar wedge between the co-movement of demand and capacity utilization as formulated here can be generated by exogenous shocks to capacity q. Comin et al (2023) use shocks of this type.…”

“…Building on this mechanism, Alvarez-Lois (2006) studies the role of capacity for the propagation of monetary policy shocks. More recently, Comin, Johnson and Jones (2023) build a model for the U.S. and conclude that capacity constraints together with capacity shocks and loose monetary policy explain the recent inflation dynamics. Kuhn and George (2019) show that capacity constraints are important to generate specific business cycle facts jointly.…”

The Shifting and Steepening of Phillips Curves During the Pandemic Recovery: International Evidence and Some Theory

“…Our model features flexible wages and a richer treatment of production and firms 1 marginal costs, which allows us to emphasize the steepening of sectoral and aggregate Phillips curve and assess the model's quantitative performance. Our paper is also related to Comin et al 2023. These authors introduce potentially binding constraints in an estimated multi-sector model and show that these can shift Phillips curve up.…”

Pandemic-Era Inflation Drivers and Global Spillovers

“…As in Gagliardone and Gertler (2023) and Blanchard and Bernanke (2023), we highlight the role of oil shocks, product price increases and labor market tightness. As in Comin, Johnson, and Jones (2023), Amiti, Heise, Karahan, and S ¸ahin (2023) and Ferrante, Graves, and Iacoviello (2023), we emphasize the role of global supply chains. We differ from these papers in that we allow for a full global trade and production network input-output structure, so that all sector and aggregate price changes are endogenous to shocks across country-sectors in the world.…”