Salomé Baslandze and Simon Fuchs
Working Paper 2025-8
September 2025
Full text 
Abstract:
We study the role of supply chain disruptions in shaping consumer prices, focusing on both firms' own import shocks and strategic responses to competitors' disruptions. Using a newly constructed microlevel dataset that links transaction-level US import data from bills of lading with high-frequency consumer prices and sales from a consumer panel, we develop a novel approach to estimate the price effects of cost shocks and product availability. Motivated by a model of delivery delays, cost shocks, and firm pricing, we implement a shift-share identification strategy based on delivery shortfalls, port congestion, and freight and import costs. We find sizable pass-through elasticities: firms raise prices in response to higher import costs and delivery delays, especially when disruptions persist. We also identify strategic pricing: firms—including non-importers—increase prices in response to competitors' supply chain disruptions. Using our estimates and back-of-the-envelope calculations from the model, we show that strategic interactions significantly amplified the direct effects of supply chain shocks on consumer prices during the pandemic.
JEL classification: E31, F14
Key words: supply chains, inflation, delivery delays, strategic interactions, pass-through, inventory
https://doi.org/10.29338/wp2025-08
The authors are grateful to KC Pringle and Michael Sparks for outstanding research assistance. They thank seminar and conference participants at the University of Mississippi, Monash University, ISOT, the SEM Conference (Georgia Tech), the Firm Dynamics Workshop (Federal Reserve Bank of Atlanta), the Virtual Seminar Series in Innovation and Growth, the Federal Reserve Bank of Minneapolis, SED, the BSE Summer Forum, Workshop on International Economic Networks (WIEN), Armenian Economic Association, and the System Committee on Macroeconomics for helpful feedback. They are especially indebted to their discussants, Davin Chor, Sebastian Heise, and Viacheslav Sheremirov, and to Leo Feler for support with the Numerator data. They also benefited from insightful comments by Pol Antràs, Michael McMahon, and Jon Willis. The views expressed in this paper are those of the authors and do not necessarily reflect the views of the Federal Reserve Bank of Atlanta, the Federal Reserve System, or its staff.
Please address questions regarding content to Salomé Baslandze, Federal Reserve Bank of Atlanta and CEPR, baslandze.salome@gmail.com; or Simon Fuchs, Federal Reserve Bank of Atlanta, sfuchs.de@gmail.com.
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