Journal article

State dependence of monetary policy during global supply chain disruptions

Abstract:: We study how global supply chain disruptions affect monetary policy transmission. Post-pandemic evidence indicates surging transportation costs, goods-market imbalances, and rising prices. We develop a model in which logistical bottlenecks (upstream slack coexisting with downstream shortages) steepen the aggregate supply curve. This convexity amplifies price responses to monetary policy while dampening output effects. Threshold VAR and Local Projection estimates are consistent with this mechanism: during disruptions, contractionary policy reduces prices more at smaller output cost, easing the stabilization trade-off.

Publication status:: Accepted

Peer review status:: Peer reviewed

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APA Style

Bai, X., Jesus, F.-V., Li, Y., & Zanetti, F. (2026). State dependence of monetary policy during global supply chain disruptions. Journal of Political Economy Macroeconomics.

MLA Style

Bai, X, et al. “State Dependence of Monetary Policy during Global Supply Chain Disruptions.” Journal of Political Economy Macroeconomics, 2026.

Chicago Style

Bai, X, F-V Jesus, Y Li, and F Zanetti. 2026. “State Dependence of Monetary Policy during Global Supply Chain Disruptions.” Journal of Political Economy Macroeconomics.
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Authors

+ Bai, X More by this author

Role:: Author

+ Jesus, F-V More by this author

Role:: Author

+ Li, Y More by this author

Role:: Author

+ Zanetti, F More by this author

Institution:: University of Oxford
Division:: SSD
Department:: Economics
Oxford college:: Wadham College
Role:: Author

+ British Academy More from this funder

Funder identifier:: https://ror.org/0302b4677
Grant:: SRG2526\261943

Publisher:: University of Chicago Press
Journal:: Journal of Political Economy Macroeconomics More from this journal
Acceptance date:: 2026-05-01
EISSN:: 2832-935X
ISSN:: 2832-9341

Language:: English
Keywords:: inflation

monetary policy

supply chain disruption

state dependence

convex supply curve
Pubs id:: 2423150
Local pid:: pubs:2423150
Deposit date:: 2026-05-24
ARK identifier:: ark:/29072/ora_293666ec4ab14488864529d483fece70

Terms of use

Notes:: This article has been accepted for publication in Journal of Political Economy Macroeconomics.

Licence:: Terms and Conditions of Use for Oxford University Research Archive

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