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The great supply shock and the euro area, viewed through a suite of supply indices

Author

Listed:
  • Labhard, Vincent
  • Saliba, Maria Christine

Abstract

This paper examines the great supply shock following the pandemic and the invasion of Ukraine, using a novel suite of supply indices. The suite has indices for the euro area total economy, euro area industries, sectors and countries. The suite also computes the contributions to the indices from supply drivers at origin, in transport, or at destination. The results from the suite show that the supply shock has had wide-spread effects, and that their dynamics have been industry-, sector- and country-specific. Supply conditions have been tighter for longer in the euro area than other areas, in automobile than digital and food industries, in services relative to other sectors, and in some countries than others. The drivers at home appear to account for an increasing share of the specificity at the end of the sample, and a broader data set helps to better capture these drivers. The results also confirm that the supply indices in the suite lag supply shocks and lead variables susceptible to the effects of supply shocks. JEL Classification: C43, C82, E66, R32, R41

Suggested Citation

  • Labhard, Vincent & Saliba, Maria Christine, 2025. "The great supply shock and the euro area, viewed through a suite of supply indices," Working Paper Series 3015, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20253015
    Note: 360650
    as

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    File URL: https://www.ecb.europa.eu//pub/pdf/scpwps/ecb.wp3015~8ea9d0b0e0.en.pdf
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    More about this item

    Keywords

    euro area countries; industries; sectors; supply chains; supply conditions;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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