Issue: The COVID-19 pandemic and associated shutdown of economic activity, first in China, then in the U.S. has drawn stark attention to the consequences of long supply chains. For example, disruptions in the production/shipments of protective masks from China and of pharmaceutical feedstocks from India, underscored how disruptions can transmit shocks in one nation to firms and consumers in the U.S.
Objective: This project examines the consequences of longer supply chains and identifies possible risk-reducing strategies. The Cross-Border Threat Screening and Supply Chain Defense Center (CBTS) and the National Bureau of Economic Research (NBER) are collaborating to examine the potential risks associated with global supply chains on which the U.S. economy depends.
Outcomes: The collaborations include meetings with Department of Homeland Security (DHS) leaders and their operational partners to identify areas of concern and continue with the selection of researchers funded through a joint NBER and CBTS competition. The six selected sub-projects will help to identify key aspects of our global production networks that are sources of vulnerability for essential goods and services and look along the horizon to identify supply chains that place the nation’s economic health at risk.
Value Proposition: This project will generate new research findings and build a community of economic researchers working on supply chain issues. The results will inform the design of policies to ameliorate risks, such as public or private incentives for establishing multiple sources for production-critical materials, regulatory requirements for the maintenance of private inventories designed to reduce the risk of stock-out or supply interruption, or public stockpiles of essential goods.
James Poterba, Ph.D., MIT Mitsui professor of economics and National Bureau of Economic Research president
Chad Syverson, Ph.D., The University of Chicago Booth School of Business George C. Tiao Distinguished Service Professor of Economics
Laura Alfaro, Ph.D., Harvard Business School Warren Alpert Professor of Business Administration