Supply shock

(redirected from Supply Shocks)

Supply shock

An event that influences production capacity and costs in an economy.

Supply Shock

Any sudden event that dramatically but (usually) temporarily increases or decreases supply for one or more goods or services. The event may result from government intervention, such as a change in money supply, or may be a random occurrence in the market. For example, a sudden discovery of oil in a field previously thought mainly dry will increase the supply of oil, which will lower the price, assuming demand remains constant. See also: Demand shock.
Mentioned in ?
References in periodicals archive ?
Macroeconomic and financial conditions have been stable, despite a series of weather-related supply shocks.
Oil supply shocks would be expected to generate an independent impact on activity.
One possible explanation for the mysterious combination of stronger growth and low inflation is that, in addition to stronger aggregate demand, developed economies have been experiencing positive supply shocks.
The results indicate that for some countries, relative supply shocks can be a significant source of real exchange rate fluctuations.
It also said that recovery in the agricultural sector will allow the growth rebound to be shared by larger segments of the population, but the sector remains vulnerable to weather-related supply shocks.
This reflected supply shocks such as the increase in rice prices, seasonal effects of the holy month of Ramadan when demand rises, and a lagging impact of the exchange-rate adjustment in March.
Therefore, the co-movement between oil and stock prices provides a basis for identifying demand and supply shocks.
Producers in these countries can also profit from potential price swings caused by supply shocks and FX swings that provide opportunities for hedging.
The low water levels, along with the outage of Switzerland's only oil refinery, forced the country to tap its strategic reserves typically intended for times of war or global supply shocks.
EU Commission Vice President for Energy Union Maros Sefcovic said, "The improvement of infrastructure through realistic and feasible projects is crucial to diversify energy resources and strengthen the region's resilience to supply shocks.
Kilian proposes a structural vector autoregression (VAR) model to identify underlying demand and supply shocks in the global oil market.
These labour supply shocks have contained wage growth in the face of robust employment growth.