What question did this study set out to answer?

To determine the role of container shipping trade and separate domestic demand shocks from foreign demand shocks during the early 2020 U.S. economic contraction and subsequent recovery.

June 1, 2021Federal Reserve Bank of Dallas, Working PapersOpen Access

Container Trade and the U.S. Recovery

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To determine the role of container shipping trade and separate domestic demand shocks from foreign demand shocks during the early 2020 U.S. economic contraction and subsequent recovery.
Constructed a novel monthly index tracking the volume of container trade entering and leaving North America.
Integrated the trade index into a structural macroeconomic vector autoregressive (VAR) model to isolate domestic demand shocks from foreign demand shocks.
Identified a sharp drop in domestic demand as the primary driver of the early 2020 U.S. economic downturn, contrasting with dynamics observed during the Great Recession.
Demonstrated that although detrended headline indicators showed recovery to near 90% of prepandemic levels by March 2021, the domestic demand component of manufacturing output reached only 57% and real personal consumption reached 78%.
Found that unexpected reductions in container shipping market frictions accounted for the discrepancy between overall economic indicators and the subdued domestic recovery.

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Implication

Econometric analysis uncovers sluggish domestic demand recovery in the United States, indicating that container shipping efficiencies masked persistent consumer weakness.

Cite This Study

Kilian et al. (2021) studied this question.

synapsesocial.com/papers/6a7eb8ffa390b11a0aa6c774 https://doi.org/10.24149/wp2108

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Implication

Econometric analysis uncovers sluggish domestic demand recovery in the United States, indicating that container shipping efficiencies masked persistent consumer weakness.

Container Trade and the U.S. Recovery

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Container Trade and the U.S. Recovery

Key Points

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Implication

Cite This Study

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