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Co-authored with Nektarios Michail and Lena Cleanthous. The article was published in December's 2022 issue of SUERF Policy Brief, No 482.

Consumer inflation across the globe rebounded in 2021, also as a result of supply side disruptions, one of which is the increase in freight costs.

To elaborate on the relationship between inflation and shipping costs, we use disaggregated monthly data from January 2009 to August 2021, employing both constant tax inflation and the standard price indices.

Following a shock in freight rates, the most hard-hit sectors appear to be garments and major household appliances, items that have traditionally been manufactured outside the euro area.

In addition, when freight rates rise more than $1,300-$1,500 per day, the sensitivity of inflation to their changes increases.