Although international shipping costs are not included in import price indices, importers may pass changes in costs onto consumers in a manner that affects aggregate price growth. Kansas City Fed economists Nicholas Sly and A. Lee Smith and research associates Trenton Herriford and Elizabeth Johnson, evaluated this pass-through and found that a 15 percent increase in shipping costs leads to a 0.10 percentage point increase in core inflation after one year.

Further Resources

Read “How Does A Rise in International Shipping Costs Affect Inflation” by Nicholas Sly and A. Lee Smith

Read "Global Supply Chain Disruptions Can Be Seen Anywhere, but Their Costs Are Not the Same Everywhere" by Nicholas Sly and Anson Soderbery

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