Question A:
Firms’ incentives to reduce costs by sourcing inputs and products abroad have caused many European industries to become more vulnerable to supply chain disruptions.
Responses
Responses weighted by each expert's confidence
Question B:
Private firms have inadequate incentives to make investments to reduce the risk that disruptions in the supply of imports will cause shortages and raise domestic prices.
Responses
Responses weighted by each expert's confidence
Question C:
Prioritisation of efficiency over resilience in global supply chains makes current disruptions likely to continue beyond 2022.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
 Franklin Allen |
Imperial College London | Bio/Vote History | ||
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Difficult to know the extent to which current disruptions could have been anticipated and what difference that would have made.
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 Pol Antras |
Harvard | Bio/Vote History | ||
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There has also been a lot of domestic fragmentation. Domestic chains (like toilet paper or meat in the US) have also been disrupted by COVID
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 Oriana Bandiera |
London School of Economics | Bio/Vote History | ||
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 Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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 Nicholas Bloom |
Stanford | Bio/Vote History | ||
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Probably, but from British experience supply chain crisis can also be domestic, so that international supply helps to resolve these.
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 Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
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 Elena Carletti |
Bocconi | Did Not Answer | Bio/Vote History | |
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 Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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 Paul De Grauwe |
LSE | Bio/Vote History | ||
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 Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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Sourcing may make the supply chain more vulnerable, but it is not clear whether that is abroad makes any difference.
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 Ernst Fehr |
Universität Zurich | Bio/Vote History | ||
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 Xavier Freixas |
Barcelona GSE | Did Not Answer | Bio/Vote History | |
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 Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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 Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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 Francesco Giavazzi |
Bocconi | Did Not Answer | Bio/Vote History | |
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 Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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 Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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 Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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 Sergei Guriev |
Sciences Po | Bio/Vote History | ||
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 Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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But the exposure is not a new or recent phenomenon -- what is recent is that the risk materialized .
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 Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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 Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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The question is about the counterfactual. Not clear whether home-sourcing could lead a different class of bottlenecks: simultaneity.
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 Botond Kőszegi |
Central European University | Bio/Vote History | ||
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 Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
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 Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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 Thierry Mayer |
Sciences-Po | Bio/Vote History | ||
 Costas Meghir |
Yale | Bio/Vote History | ||
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 Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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 Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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 Torsten Persson |
Stockholm University | Bio/Vote History | ||
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 Christopher Pissarides |
London School of Economics and Political Science | Did Not Answer | Bio/Vote History | |
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 Richard Portes |
London Business School | Bio/Vote History | ||
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 Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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 Carol Propper |
Imperial College London | Bio/Vote History | ||
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 Imran Rasul |
University College London | Did Not Answer | Bio/Vote History | |
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 Lucrezia Reichlin |
London Business School | Did Not Answer | Bio/Vote History | |
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 Ricardo Reis |
London School of Economics | Bio/Vote History | ||
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This is often stated, but I have not seen hard evidence actually backing it.
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 Rafael Repullo |
CEMFI | Bio/Vote History | ||
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 Hélène Rey |
London Business School | Bio/Vote History | ||
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 Antoinette Schoar |
MIT | Bio/Vote History | ||
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supply chain disruptions can also occur within countries, e.g. strikes, political unrest, etc. it's a relative assessment of vulnerabilities
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 Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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 Daniel Sturm |
London School of Economics | Did Not Answer | Bio/Vote History | |
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 John Van Reenen |
LSE | Bio/Vote History | ||
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 John Vickers |
Oxford | Bio/Vote History | ||
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 Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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 Karl Whelan |
University College Dublin | Bio/Vote History | ||
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Firms always have an incentive to reduce costs. Globalisation increased dependence on imported inputs and this has increased vulnerability.
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 Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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 Fabrizio Zilibotti |
Yale University | Did Not Answer | Bio/Vote History | |
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Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Franklin Allen |
Imperial College London | Bio/Vote History | ||
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I am not exactly sure what "inadequate incentives" refers to. Is this about externalities or other market failures or what?
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Pol Antras |
Harvard | Bio/Vote History | ||
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You can make the case for certain external effects, but they are not always theoretically compelling, and there is little evidence for them.
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Oriana Bandiera |
London School of Economics | Bio/Vote History | ||
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Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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No strong externalities. One problem is that many have inconsistent plan Bs: relying on the same supplier, if something happens.
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Nicholas Bloom |
Stanford | Bio/Vote History | ||
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Inventory control is all about this - hold more inventory at a cost, but buffer supply shock. Firms can manage this.
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Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
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Elena Carletti |
Bocconi | Did Not Answer | Bio/Vote History | |
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Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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Paul De Grauwe |
LSE | Bio/Vote History | ||
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Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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Ernst Fehr |
Universität Zurich | Bio/Vote History | ||
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Xavier Freixas |
Barcelona GSE | Did Not Answer | Bio/Vote History | |
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Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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Francesco Giavazzi |
Bocconi | Did Not Answer | Bio/Vote History | |
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Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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Sergei Guriev |
Sciences Po | Bio/Vote History | ||
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Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Some firms may have miscalculated the incentives, but most do internalize much of the costs of disruption.
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Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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Private firms' incentives depend on expected price sensitivities. As long as prices reflect possible future shortages, firms will react.
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Botond Kőszegi |
Central European University | Bio/Vote History | ||
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Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
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Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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Resilience is bit like insurance. Underprovision in priv. mkts due to info&public goods prob. Mitigating disruptions requires collaboration.
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Thierry Mayer |
Sciences-Po | Bio/Vote History | ||
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Costas Meghir |
Yale | Bio/Vote History | ||
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Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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Torsten Persson |
Stockholm University | Bio/Vote History | ||
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Christopher Pissarides |
London School of Economics and Political Science | Did Not Answer | Bio/Vote History | |
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Richard Portes |
London Business School | Bio/Vote History | ||
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Clear externality.
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Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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Carol Propper |
Imperial College London | Bio/Vote History | ||
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Imran Rasul |
University College London | Did Not Answer | Bio/Vote History | |
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Lucrezia Reichlin |
London Business School | Did Not Answer | Bio/Vote History | |
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Ricardo Reis |
London School of Economics | Bio/Vote History | ||
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What is the missing market? The firm would benefit greatly from being the only supplier when other firms cannot.
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Rafael Repullo |
CEMFI | Bio/Vote History | ||
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Hélène Rey |
London Business School | Bio/Vote History | ||
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Antoinette Schoar |
MIT | Bio/Vote History | ||
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Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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Firms have incentives to arrange production to exploit price increases caused by disruptions. Should increase demand for domestic suppliers
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Daniel Sturm |
London School of Economics | Did Not Answer | Bio/Vote History | |
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John Van Reenen |
LSE | Bio/Vote History | ||
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John Vickers |
Oxford | Bio/Vote History | ||
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Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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Karl Whelan |
University College Dublin | Bio/Vote History | ||
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I'm not sure there is clear evidence for a market failure on this issue.
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Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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I can't think of an externality, but how convincing is it?
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Fabrizio Zilibotti |
Yale University | Did Not Answer | Bio/Vote History | |
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Question C Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Franklin Allen |
Imperial College London | Bio/Vote History | ||
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Resilience should probably be part of efficiency. Either way problems are likely to persist, particularly if Russia invades Ukraine.
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Pol Antras |
Harvard | Bio/Vote History | ||
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Things ran quite smoothly up to 2020. COVID has been the mother of all supply chain shocks. If the pandemic subsides,so will the disruptions
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Oriana Bandiera |
London School of Economics | Bio/Vote History | ||
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Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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Who says they are prioritizing efficiency over resilience?
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Nicholas Bloom |
Stanford | Bio/Vote History | ||
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The Lean dilemma: just-in-time improves efficiency but reduces resiliency. There is a trade-off, and firms will try to maximize efficiency.
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Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
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Elena Carletti |
Bocconi | Did Not Answer | Bio/Vote History | |
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Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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Paul De Grauwe |
LSE | Bio/Vote History | ||
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Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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Ernst Fehr |
Universität Zurich | Bio/Vote History | ||
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Xavier Freixas |
Barcelona GSE | Did Not Answer | Bio/Vote History | |
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Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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Francesco Giavazzi |
Bocconi | Did Not Answer | Bio/Vote History | |
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Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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Sergei Guriev |
Sciences Po | Bio/Vote History | ||
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Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Especially geopolitical tensions remain heightened.
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Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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I don't see the alleged prioritization of efficiency over resilience. It is a matter expectations, and people learn from past experiences.
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Botond Kőszegi |
Central European University | Bio/Vote History | ||
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Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
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Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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Thierry Mayer |
Sciences-Po | Bio/Vote History | ||
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Costas Meghir |
Yale | Bio/Vote History | ||
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Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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Torsten Persson |
Stockholm University | Bio/Vote History | ||
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Christopher Pissarides |
London School of Economics and Political Science | Did Not Answer | Bio/Vote History | |
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Richard Portes |
London Business School | Bio/Vote History | ||
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Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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Carol Propper |
Imperial College London | Bio/Vote History | ||
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Imran Rasul |
University College London | Did Not Answer | Bio/Vote History | |
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Lucrezia Reichlin |
London Business School | Did Not Answer | Bio/Vote History | |
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Ricardo Reis |
London School of Economics | Bio/Vote History | ||
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The existence of a tradeoff between efficiency and resilience is not clear to me.
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Rafael Repullo |
CEMFI | Bio/Vote History | ||
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Hélène Rey |
London Business School | Bio/Vote History | ||
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Antoinette Schoar |
MIT | Bio/Vote History | ||
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Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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Daniel Sturm |
London School of Economics | Did Not Answer | Bio/Vote History | |
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John Van Reenen |
LSE | Bio/Vote History | ||
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John Vickers |
Oxford | Bio/Vote History | ||
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Resilience is part of efficiency
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Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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Karl Whelan |
University College Dublin | Bio/Vote History | ||
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I'm sure some firms that were badly affected by shortages will re-examine their approach but I don't expect big systemic changes.
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Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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Shouldn't we think of EXPECTED efficiency?
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Fabrizio Zilibotti |
Yale University | Did Not Answer | Bio/Vote History | |
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