Ramya Raghavan

Abstract: We develop a novel measure of climate policy uncertainty based on newspaper coverage. Our index spikes during key U.S. climate policy events—including presidential announcements on international agreements, congressional debates, and regulatory disputes—and shows a recent upward trend. Using an instrument for plausibly exogenous uncertainty shifts, we find that higher climate policy uncertainty decreases output and emissions while raising commodity and consumer prices, acting as supply rather than demand shocks. Monetary policy counteracts these inflationary pressures, affecting the transmission of climate policy uncertainty. Firm-level analyses show stronger declines in investment and R&D when firms have higher climate change exposure.

Abstract: This paper studies the macroeconomic consequences of global supply chain disruptions, focusing on maritime choke points critical to international trade. We identify supply chain shocks based on disruptions at key locations like the Suez and Panama Canal, using narrative accounts and high-frequency financial data. These shocks lead to a significant and persistent increase in shipping costs, which in turn has substantial economic consequences. Economic activity falls significantly and producer and consumer prices rise persistently. Global shipping capacity initially contracts before expanding sluggishly in response to persistently elevated shipping costs. The shocks also lead to a significant increase delivery times and industry shortages but are not associated with changes in geopolitical risk—consistent with our interpretation of exogenous supply chain disruptions. Our reduced-form evidence provides new empirical targets for quantitative trade and network models.