When supply chain uncertainty rises - i.e., firms are unsure whether their inputs will arrive - energy prices stop being just a simple production cost. They become a signal about congestion in the transport network. Firms read a spike in energy prices as a warning that deliveries of production inputs will delay, and raise prices in anticipation. This makes transitory energy shocks unusually inflationary.

(Own summary) We document that China’s exports to the euro area have risen recent years, and shifted from labour-intensive final goods toward advanced-manufacturing intermediates. We find that cheaper intermediate inputs boost EU production and lower inflation, while competing final goods displace it, leaving the net short-run effect on euro area GDP expansionary.

Tariff shocks transmit as a negative aggregate demand shocks and can depreciate the US nominal (and real) exchange rate, against the textbook prediction. This average effect depends on structural trade policy uncertainty, i.e. uncertainty about the persistence of the trade-policy regime. A tariff shock under high S-TPU depreciates the US exchange rate