Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/249223 
Year of Publication: 
2021
Series/Report no.: 
Texto para Discussão No. 2705
Publisher: 
Instituto de Pesquisa Econômica Aplicada (IPEA), Brasília
Abstract (Translated): 
The uncertainties and economic effects after the outbreak of Covid-19 raised major concerns about the business conditions of the Brazilian automotive sector. This study contributes to this debate in course and analyzes the demand and supply of automobiles and light commercial vehicles in the Brazilian conjuncture, preceding the pandemic crisis, and then points out how this type of productive activity would react to unexpected shocks in the initial period of the outbreak of Covid-19 in the country. To accomplish this tasks, we applied a vector auto-regressive (VAR) model with functions of impulse response and decomposition of the variance of the forecast errors. The main findings suggest that credit, income, price and tax influence the business conditions of the sector in the short term. Nevertheless, the fluctuations generated by demand or supply shocks are momentary and the sector typically returns to a stationary trend over a period of five months. In this variant, the analysis suggests that the automotive activity has a capacity for quick recovery for the trend even in the face of an eventual adverse shock of the business cycle such as that of the pandemic period of Covid-19. This convergence time can be shortened by credit and tax reduction policies, as well as the new automation and electrification technologies in the automotive industry.
Subjects: 
business cycle
Covid-19
automotive industry
model VAR
JEL: 
C22
C32
L62
O12
O18
I19
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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