Template-Type: ReDIF-Paper 1.0
Title: Supply Chain Disruptions, Time to Build, and the Business Cycle
Author-Name: Matthias Meier
Author-Email: m.meier@uni-mannheim.de

Classification-JEL: E01, E22, E32
Keywords: Time to build, supply chain disruptions, business cycles

Abstract: We provide new evidence that (i) time to build is volatile and countercyclical,
and that (ii) supply chain disruptions lengthen time to build. Motivated by these
findings, we develop a general equilibrium model in which heterogeneous firms face
non-convex adjustment costs and multi-period time to build. In the model, supply
chain disruptions lengthen time to build. Calibrating the model to US micro data,
we show that disruptions, which lengthen time to build by 1 month, depress GDP by
1% and aggregate TFP by 0.2%. Structural vector autoregressions corroborate the
quantitative importance of supply chain disruptions.

Note: 
Length: 50
Creation-Date: 2020-03
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp160
Handle: RePEc:bon:boncrc:CRCTR224_2020_160