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Assessing the Impact of Supply Disruptions on the Global Pandemic Recovery
Author:
Harri Kemp
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Mr. Rafael A Portillo
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Marika Santoro 0000000404811396 https://isni.org/isni/0000000404811396 International Monetary Fund

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Series:
IMF Working Papers
Volume/Issue:
Volume 2023: Issue 042
Language:
English
Publication Date:
24 Feb 2023
DOI:
https://doi.org/10.5089/9798400235672.001
ISBN:
9798400235672
ISSN:
1018-5941
Pages:
42
Keywords:
Supply constraints; manufacturing; output; inflation; supply and demand demand shock; Ukraine war; supply disruption; supply-demand decomposition; inflation deviation; Supply shocks; Economic recovery; Industrial production; Global
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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We estimate the role of (pre-Ukraine war) supply disruptions in constraining the Covid-19 pandemic recovery, for several advanced economies and emerging markets, and globally. We rely on two approaches. In the first approach, we use sign-restricted Vector Auto Regressions (SVAR) to identify supply and demand shocks in manufacturing, based on the co-movement of surveys on new orders and suppliers’ delivery times. The effects of these shocks on industrial production and GDP are recovered through a combination of local projection methods and the input-output framework in Acemoglu et al. (2016). In the second approach, we use the IMF’s G20 model to gauge the importance of supply shocks in jointly driving activity and inflation surprises. We find that supply disruptions subtracted between 0.5 and 1.2 percent from global value added during the global recovery in 2021, while also adding about 1 percent to global core inflation that same year.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2023: Issue 042