Seminar: Sebastian Heise (NY Fed)

Sebastian Heise is a research economist in the Labor and Product Market Studies Function at the Federal Reserve Bank of New York. His main research focuses on long-term business relationships between firms and how such relationships influence the aggregate economy. His fields of interest include monetary economics, international trade, macro labor, firm-to-firm relationships, price setting and price rigidity.

He holds a Ph.D. in economics from Yale University. Prior to that, he worked in the financial stability directorate of the Bank of England, focusing on bank funding and liquidity. He also holds an M.Sc. in Financial Economics (with distinction) from the University of Oxford, a Grad. Diploma in Mathematics (with distinction) from King's College London, and a B.Sc. in Management from European Business School, Oestrich-Winkel.

Title: "Input Sourcing under Climate Risk: Evidence from U.S. Manufacturing Firms"

Abstract: We study the effect of climate risk on how firms organize their supply chains. We use transaction-level data on U.S. manufacturing imports to construct a novel measure of input sourcing risk based on the historical volatility of ocean shipping times. Our measure isolates the unexpected component of shipping times that is induced by weather conditions along more than 40,000 maritime routes. We first document that unexpected shipping delays induced by weather shocks have significant negative effects on importers’ revenues, profits, and employment. We then show that more exposed firms actively diversify the risk of weather delays by using more routes and sourcing from more foreign suppliers, although their total imports decline. To rationalize these findings, we introduce shipping time risk into a general equilibrium model of importing with firm heterogeneity. Our quantitative analysis predicts substantial costs for the U.S. economy associated with different sources of supply chain risk.