Disruptions of Key Chokepoints and Their Macroeconomic Impact

A research paper published by the Bank for International Settlements (BIS) points out that geopolitical tensions are increasing the risk of disruptions to key chokepoints in global supply chains. Substitution effects and inventory buffers can mitigate output shocks, but often come with higher input prices. Addressing such disruptions requires tailored policies based on the cause, the criticality of the chokepoint, and the private sector's ability to substitute and buffer.