Chokepoint disruptions and their macroeconomic consequences
Key takeaways
- Rising geopolitical tensions, including trade restrictions and conflicts, are increasingly disrupting global supply chains, posing significant risks at critical chokepoints.
- Strong substitution effects and the use of inventories have helped to mitigate adverse output effects of chokepoint disruptions, but they often come at the cost of higher input prices.
- An effective policy response to chokepoint disruptions requires a tailored approach that takes account of the cause, centrality and the private sector’s ability to substitute and draw on buffers.
The views expressed in this publication are those of the authors and do not necessarily reflect the views of the BIS or its member central banks.
