New supply bottlenecks index based on newspaper data.

Series: Working Papers. 2304.

Author: Pablo Burriel, Iván Kataryniuk, Carlos Moreno Pérez and Francesca Viani.

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New supply bottlenecks index based on newspaper data. (7 MB)

Summary

We develop a new monthly indicator of supply bottlenecks using newspaper articles. The supply bottlenecks index (SBI) provides a consistent narrative of supply issues related to wars, natural disasters, strikes and, most recently, the COVID-19 pandemic. Innovations in the SBI have important macroeconomic implications: an increase in the SBI functions as a cost-push shock, decreasing industrial production and employment, and pushing prices up, so that monetary policy faces important trade-offs.