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| Title: | | The production impact of cash-for-clunkers: Implications for stabilization policy  |
| Authors: | | Copeland, Adam Kahn, James |
| Issue Date: | | 2011 |
| Series/Report no.: | | Staff Report, Federal Reserve Bank of New York 503 |
| Abstract: | | Stabilization policies frequently aim to boost spending as a means to increase GDP. Spending does not necessarily translate into production, however, especially when inventories are involved. We look at the cash-for-clunkers program that helped finance the purchase of nearly 700,000 vehicles in 2009. An analysis of auto sales and production movements reveals that the program did prompt a large spike in sales. But the program had only a modest and fleeting impact on production, as inventories buffered the movements in sales. These findings suggest caution in judging the efficacy of such policies by their impact on spending alone. |
| Subjects: | | cash-for-clunkers automobiles stimulus |
| JEL: | | E23 E65 L62 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Staff Reports, Federal Reserve Bank of New York
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