Macroeconomic Impacts on the U.S. of Maritime

Transcript:Macroeconomic Impacts on the U.S. of Maritime:
Macroeconomic Impacts on the U.S. of Maritime Supply-Chain Shocks Associated with the War in Ukraine The 97th Annual Conference of the Western Economic Association International, Portland, Oregon Adam Rose, University of Southern California Zhenhua Chen, Ohio State University Fred Roberts, Rutgers University Dan Wei, University of Southern California Andrew Tucci, U.S. Coast Guard (ret) July 2, 2022 Presentation Outline Background Literature Review Data The GTAP Model Results Conclusions Background COVID pandemic: Disrupted supply chains Forms the backdrop for the major economic challenges we face today, including inflation Situation exacerbated by: Shortages of shipping containers Backlogs in ports Switch to just-in-case stockpiling instead of just-in-time Grounding of the container ship Ever Given in the Suez Canal in March would have been bad enough, but was made much worse because it happened in the context of these other disruptions. Very little study of complex, multi-vector disruptions, and their cascading economic impacts. Background Complex disruptions have cascading effects much worse than the sum of the effects of the individual disruptions. We started studying such complex disruptions Building scenarios Describing the economic sectors they impact Studying potential mitigations Building a user-friendly tool for estimating cascading impacts Then along came the Ukraine War A major disruption occurring in the context of already major economic disruptions. Background Ukraine War is already having an impact on global markets for major commodities Grains, Metals, Energy products Grains: In 2021, 11.4% of global corn exports and 8.5% of global wheat exports originated from Ukraine In 2021, 13.1% of global wheat exports originated from Russia Prior to the War, in excess of 90% of Ukrainian agricultural exports were shipped from the country’s Black Sea ports - currently impossible Possibility of moving goods by river barge, rail, or truck is limited. Moreover, as much as 20% of Ukraine winter crops may not be harvested Background Metals Concerns about access to Russian platinum and other critical minerals - sanctions In 2021, Russia was the fourth-largest exporter of unwrought or semi-manufactured platinum and other precious metals Metals are at the front-end of long-supply-chain linkages Leading to key manufactured goods such as pig iron, unfinished steel, steel products and catalytic converters for automobiles. Our purpose: analyze the impacts of disruption of exports of grains and metals from Russia and Ukraine on the economy of the US and the world First step in a broader study of other impacts of the Ukraine War within the