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  • December 2023
  • Article
  • Journal of International Economics

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

By: Alberto Cavallo and Oleksiy Kryvtsov
  • Format:Print
  • | Pages:29
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Abstract

We use a detailed micro dataset on product availability and stockouts to construct a direct high-frequency measure of consumer product shortages during the 2020-2022 pandemic. We document a widespread multi-fold rise in stockouts in nearly all sectors early in the pandemic. Over time, the composition evolved from temporary to more permanently discontinued products, concentrated in fewer sectors. We show that unexpected shocks to stockout levels 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; Supply Chain; Product; Demand and Consumers

Citation

Cavallo, Alberto, and Oleksiy Kryvtsov. "What Can Stockouts Tell Us About Inflation? Evidence from Online Micro Data." Journal of International Economics 146 (December 2023).

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Replication Code and Data
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About The Author

Alberto F. Cavallo

Business, Government and the International Economy
→More Publications

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    Large Shocks Travel Fast

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    Price Discounts and Cheapflation During the Post-Pandemic Inflation Surge

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More from the Authors
  • Tracking the Short-Run Price Impact of U.S. Tariffs By: Alberto Cavallo, Paola Llamas and Franco Vazquez
  • Large Shocks Travel Fast By: Alberto Cavallo, Francesco Lippi and Ken Miyahara
  • Price Discounts and Cheapflation During the Post-Pandemic Inflation Surge By: Alberto Cavallo and Oleksiy Kryvtsov
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