## The Inflexible Structure of Global Supply Chains

_IMF Working Papers, September 13, 2019_

## Source details

**Canonical URL:** [The Inflexible Structure of Global Supply Chains](https://www.imf.org/en/publications/wp/issues/2019/09/13/the-inflexible-structure-of-global-supply-chains-48562)

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## Bibliographic details
- Authors: Tamim Bayoumi, Jelle Barkema
- Published: September 13, 2019
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513510569.001

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### Key findings
- The production structure is highly inflexible in the short run.
- Rigidity in global supply chains has, if anything, risen over time as supply chains have deepened.
- While estimated elasticities rise in the long run, supply chains remain somewhat inflexible.
- The main results are robust to alternative price measures, including measures that account for the U.S. dollar’s outsized role in trade through invoicing.
- Implications span cross-country business-cycle dynamics, propagation of sectoral shocks, and measurement of international competitiveness.

### Methodology
- A parsimonious, generalized specification is proposed to test the degree of global-supply-chain flexibility.
- The analysis focuses on how easily global value chains can re-configure in response to changes in prices.

### Robustness checks and alternative measures
- Results are tested using alternative price measures.
- Specific robustness includes price measures that account for the U.S. dollar’s outsized role in trade through invoicing.

### Subject areas and keywords
- Subject: Exchange rates, Exports, Foreign exchange, Global value chains, Globalization, Imports, International trade, Real effective exchange rates
- Keywords: countries trade, error-correction term, Exchange rates, export deflator, export openness, Exports, final-goods export, Global, Global value chains, goods price, Imports, interaction term, price change, Real effective exchange rates, trade invoicing, trade openness, WP

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_Source: https://www.imf.org/en/publications/wp/issues/2019/09/13/the-inflexible-structure-of-global-supply-chains-48562_