What Can Stockouts Tell Us About Inflation? Evidence from Online Micro Data

We use a detailed micro dataset on product availability to construct a direct high-frequency measure of consumer product shortages during the 2020–2021 pandemic. We document a widespread multi-fold rise in shortages in nearly all sectors early in the pandemic. Over time, the composition of shortages evolved from many temporary stockouts to mostly discontinued products, concentrated in fewer sectors. We show that product shortages have significant but transitory inflationary effects, and that these effects can be associated with elevated cost of replenishing inventories.