Import price inflation following the 2021 Suez canal blockage: (for)ever given or transitory?

Bernius, Nikolaus; Brüster, Gabriel; Robertson, William; Stefko, Brenton-Jan; Steinwender, Christian

Import price inflation following the 2021 Suez canal blockage: (for)ever given or transitory?

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Bernius, N, Brüster, G, Robertson, W, Stefko, B, Steinwender, C. Import price inflation following the 2021 Suez canal blockage: (for)ever given or transitory?. 2022. handle: http://hdl.handle.net/10230/54969

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Abstract

Our study uses an arguably exogenous supply chain shock generated by the March 2021 blockage of the Suez Canal to analyze contributions to import price inflation and transport method substitution. Using a quasi-experimental Event Study methodology to analyze European trade data, we identify upward pressure in import prices as well as an import quantity contraction. This suggests that supply chain disruptions may be a legitimate channel for inflation. We do not, however, identify any substitution effect; air travel does not appear to have been utilized more frequently as a result of the blockage.