What Can Stockouts Tell Us About Inflation? Evidence from Online Micro Data / Alberto Cavallo, Oleksiy Kryvtsov.

Format:

Book

Author/Creator:

Cavallo, Alberto.

Contributor:

National Bureau of Economic Research.

Kryvtsov, Oleksiy.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29209.

NBER working paper series no. w29209

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

We use a detailed micro dataset on product availability to construct a direct high-frequency measure of consumer product shortages during the 2020-2021 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. 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 cost of replenishing inventories.

Notes:

Print version record

September 2021.