[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-seo-297232-105":3,"detail-sidebar-cat-0-en-105":81,"doc-detail-297232-en":131},{"code":4,"msg":5,"data":6},0,"ok",{"site_id":7,"language":8,"slug":9,"title":10,"keywords":11,"description":12,"schema_data":13,"social_meta":74,"head_meta":76,"extra_data":78,"updated_unix":80},105,"en","convex-supply-curves-research-paper","CONVEX SUPPLY CURVES - Research Paper","","NBER Working Paper 26829 provides empirical evidence that industries’ supply curves are convex. The study builds a putty-clay model where plant-level capacity constraints imply convex industry-level supply. The model’s central result uses capacity utilization as a sufficient statistic for supply-curve slope, enabling estimation with capacity utilization data and three instruments. Results show near-flat supply at low utilization and increasing supply at higher utilization, with state-dependent macroeconomic implications including a convex Phillips curve and larger welfare costs.",{"@graph":14,"@context":73},[15,34,56],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/document/","Document",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/document/research-report/","Research & Report",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/document/convex-supply-curves-research-paper/297232/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":49,"encodingFormat":47,"isAccessibleForFree":50,"interactionStatistic":51},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/convex-supply-curves-research-paper/297232.png","ImageObject",300,407,{"name":42,"@type":43},"Franzy","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-11-08","2026-09-18",true,{"@type":52,"interactionType":53,"userInteractionCount":55},"InteractionCounter",{"@type":54},"ViewAction",11,{"@type":57,"mainEntity":58},"FAQPage",[59,65,69],{"name":60,"@type":61,"acceptedAnswer":62},"What does the paper claim about industries’ supply curves?","Question",{"text":63,"@type":64},"The paper provides evidence that industries’ supply curves are convex, with curvature that is economically sizable at the industry level.","Answer",{"name":66,"@type":61,"acceptedAnswer":67},"How does the model explain convexity in supply at the industry level?",{"text":68,"@type":64},"It attributes convex industry supply curves to capacity constraints at the plant level, where limited short-run expansion shifts adjustments toward markups.",{"name":70,"@type":61,"acceptedAnswer":71},"What macroeconomic implications does the paper discuss from convex supply?",{"text":72,"@type":64},"It links convexity to state-dependent responses to shocks, a convex Phillips curve, and larger welfare costs of business cycles than in standard benchmarks.","https://schema.org",{"og:url":32,"og:type":75,"og:title":10,"og:site_name":45,"og:description":12},"article",{"robots":77,"canonical":32},"index,follow",{"doc_id":79,"site_id":7},297232,1790671261,{"code":4,"msg":82,"data":83},"success",[84,88,92,96,101,106,111,115,120,123,127],{"id":22,"doc_module":4,"doc_module_name":25,"category_name":85,"show_sort_weight":86,"slug":87},"Story & Novel",90,"story-novel",{"id":26,"doc_module":4,"doc_module_name":25,"category_name":89,"show_sort_weight":90,"slug":91},"Literature",80,"literature",{"id":33,"doc_module":4,"doc_module_name":25,"category_name":93,"show_sort_weight":94,"slug":95},"Exam",70,"exam",{"id":97,"doc_module":4,"doc_module_name":25,"category_name":98,"show_sort_weight":99,"slug":100},5,"Comic",60,"comic",{"id":102,"doc_module":4,"doc_module_name":25,"category_name":103,"show_sort_weight":104,"slug":105},6,"Technology",50,"technology",{"id":107,"doc_module":4,"doc_module_name":25,"category_name":108,"show_sort_weight":109,"slug":110},7,"Healthcare",40,"healthcare",{"id":112,"doc_module":4,"doc_module_name":25,"category_name":29,"show_sort_weight":113,"slug":114},8,30,"research-report",{"id":116,"doc_module":4,"doc_module_name":25,"category_name":117,"show_sort_weight":118,"slug":119},9,"Religion & Spirituality",20,"religion-spirituality",{"id":118,"doc_module":4,"doc_module_name":25,"category_name":121,"show_sort_weight":118,"slug":122},"World Cup","world-cup",{"id":124,"doc_module":4,"doc_module_name":25,"category_name":125,"show_sort_weight":124,"slug":126},10,"Lifestyle","lifestyle",{"id":128,"doc_module":4,"doc_module_name":25,"category_name":129,"show_sort_weight":97,"slug":130},19,"General","general",{"code":4,"msg":82,"data":132},{"doc_id":79,"user_id":133,"nickname":42,"user_avatar":134,"doc_module":4,"category_id":112,"category_name":29,"doc_title":10,"doc_description":12,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":55,"is_deleted":4,"is_public":22,"is_downloadable":22,"audit_status":22,"page_count":140,"language":141,"language_code":8,"site_id":7,"html_lang":8,"table_of_contents":142,"faqs":143,"seo_title":144,"seo_description":12,"update_tm":145,"read_time":146,"preview_page_count":4},2336478945519,"https://ap-avatar.wpscdn.com/davatar_085a072bc5b1113ac321206ff7593b45","NBER WORKING PAPER SERIES  \nCONVEX SUPPLY CURVES  \nChristoph Boehm  \nNitya Pandalai-Nayar  \nWorking Paper 26829  \n[http://www.nber.org/papers/w26829](http://www.nber.org/papers/w26829)  \nNATIONAL BUREAU OF ECONOMIC RESEARCH  \n1050 Massachusetts Avenue  \nCambridge, MA 02138  \nMarch 2020  \nWe thank our discussants Yuriy Gorodnichenko and Hikaru Saijo. The paper also benefited from conversations with Mark Aguiar, Pol Antras, David Baqaee, Saroj Bhattarai, Oli Coibion, Javier Cravino, Aaron Flaaen, Oleg Itskhoki, Andrei Levchenko, Chris Sims, and Jaume Ventura as well as with seminar participants at UT Austin, Princeton, Wisconsin, the Federal Reserve Board, the St Louis Fed, Tsinghua, Texas A\\&M, SED Annual Meetings, ASSA Annual Meetings, the West Coast International/Macro Workshop and Hong Kong University. Pandalai-Nayar thanks the ECB for the Baron Alexandre Lamfalussy Fellowship, which supported this research. Any opinions and conclusions expressed herein are those of the authors and do not necessarily represent the views of the U.S. Census Bureau. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.  \nNBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.  \n© 2020 by Christoph Boehm and Nitya Pandalai-Nayar. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source.  \nConvex Supply Curves  \nChristoph Boehm and Nitya Pandalai-Nayar NBER Working Paper No. 26829  \nMarch 2020  \nJEL No. E22,E32,E52,E62,F44  \nABSTRACT  \nWe provide evidence that industries' supply curves are convex. To guide our empirical analysis, we develop a putty-clay model in which capacity constraints at the plant level generate convex supply curves at the industry level. The model's key insight is that an industry's capacity utilization rate is a sufficient statistic for the slope of its supply curve. Using data on capacity utilization and three different instruments, we estimate the supply curve and find robust evidence for convexity. Supply curves are essentially flat at low levels of capacity utilization but increasing at higher levels. Further, industries with low initial capacity utilization rates expand production twice as much after demand shocks as industries that produce close to their capacity limit. Thenonlinearity we identify has a number of macroeconomic implications, including that responses to shocks are state-dependent, that the Phillips curve is convex, and that the welfare costs of business cycles are larger than in Lucas (1987) .  \nChristoph Boehm The University of Texas at Austin Department of Economics  \nBRB 3.114 2225 Speedway Austin, TX 78712  \n[chrisboe@umich.edu](chrisboe@umich.edu)  \nNitya Pandalai-Nayar Department of Economics University of Texas at Austin  \n3.142 BRB, 2225 Speedway Austin, TX 78713  \nand NBER  \n[npnayar@utexas.edu](npnayar@utexas.edu)  \n1 Introduction  \nUp until a decade ago, most commonly used frameworks in macroeconomics were either explicitly linearized, or almost linear when solved exactly (Parker, 2011) . A limitation of such frameworks is that they can lead to imprecise conclusions on aspects of the economy that are fundamentally nonlinear. While recent research has emphasized the role of such nonlinearities, there is limited direct empirical evidence on their importance.1 When the evidence exists, it is frequently controversial. For instance, there is a lack of consensus as to whether the 􀀌scal multiplier varies with the state of the business cycle.2  \nIn this paper we document robust evidence for one particular nonlinearity|we show that industries' supply curves are convex. At the industry level, our estimates suggest that the curvature of supp","cbCaiuySuxRyh6Be","https://ap.wps.com/l/cbCaiuySuxRyh6Be","pdf",2624956,87,"English","# Abstract\n# Introduction\n## Empirical Motivation and Nonlinearities\n## Convex Supply Curves and Capacity Constraints\n## Model Framework and Industry-Level Implications","[{\"question\":\"What does the paper claim about industries’ supply curves?\",\"answer\":\"The paper provides evidence that industries’ supply curves are convex, with curvature that is economically sizable at the industry level.\"},{\"question\":\"How does the model explain convexity in supply at the industry level?\",\"answer\":\"It attributes convex industry supply curves to capacity constraints at the plant level, where limited short-run expansion shifts adjustments toward markups.\"},{\"question\":\"What macroeconomic implications does the paper discuss from convex supply?\",\"answer\":\"It links convexity to state-dependent responses to shocks, a convex Phillips curve, and larger welfare costs of business cycles than in standard benchmarks.\"}]","CONVEX SUPPLY CURVES - Research Paper | PDF",1789743269,219]