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  • 2022
  • Working Paper

What Can Stockouts Tell Us About Inflation? Evidence from Online Micro Data

By: Alberto Cavallo and Oleksiy Kryvtsov
  • Format:Print
  • | Language:English
  • | Pages:40
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Abstract

We use a detailed micro dataset on product availability to construct a direct high-frequency measure of consumer product shortages during the 2020–2022 pandemic. We document a widespread multi-fold rise in shortages in nearly all sectors early in the pandemic. Over time, the composition of shortages evolved from many temporary stockouts to mostly discontinued products, concentrated in fewer sectors. We show that unexpected product shortages have significant inflationary effects within three months. These effects are larger and more persistent for imported goods and import-intensive sectors. We develop a model of inventories in a sector facing both demand and cost disturbances, and use the observed joint dynamics of stockouts and prices to show that these effects can be associated with elevated costs of replenishing inventories and higher exposure to trade.

Keywords

Prices; Stockouts; Inventories; Supply Disruptions; COVID-19 Pandemic; Macroeconomics; Inflation and Deflation; Supply Chain; Disruption; Health Pandemics; Consumer Products Industry; United States; China; Canada; France; Germany; Japan; Spain

Citation

Cavallo, Alberto, and Oleksiy Kryvtsov. "What Can Stockouts Tell Us About Inflation? Evidence from Online Micro Data." NBER Working Paper Series, No. 29209, September 2021.
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About The Author

Alberto F. Cavallo

Business, Government and the International Economy
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