3,882
edits
Auto Industry Cyclicality: Difference between revisions
no edit summary
No edit summary |
No edit summary |
||
| Line 351: | Line 351: | ||
* A related explanation for the d'''ecline in auto sales is the increase in uncertainty''' that many researchers have associated with the last recession. Bloom (2009) presents a model where irreversible investment in durable goods causes an increase in uncertainty to reduce purchases of durables. We note that a new vehicle purchase exhibits an aspect of irreversibility, because the resale value of a newly bought new auto falls dramatically immediately after being acquired.<ref>https://s3.amazonaws.com/real.stlouisfed.org/wp/2018/2018-019.pdf</ref> | * A related explanation for the d'''ecline in auto sales is the increase in uncertainty''' that many researchers have associated with the last recession. Bloom (2009) presents a model where irreversible investment in durable goods causes an increase in uncertainty to reduce purchases of durables. We note that a new vehicle purchase exhibits an aspect of irreversibility, because the resale value of a newly bought new auto falls dramatically immediately after being acquired.<ref>https://s3.amazonaws.com/real.stlouisfed.org/wp/2018/2018-019.pdf</ref> | ||
==== Cash for Clunkers Program ==== | ===== Cash for Clunkers Program ===== | ||