Interest Rates and the Market for New Light Vehicles

Adam Copeland, George Hall and Louis J. Maccini

Journal of Money, Credit and Banking, 2019, vol. 51, issue 5, 1137-1168

Abstract: We study the impact of interest rate changes on the demand and supply of new light vehicles in an environment where consumers and manufacturers face their own interest rates. Interest rate changes impact the auto market through both households and manufacturers. For the impact of rate changes on price and output growth, the household channel is quantitatively more important. A 100 basis‐point increase in both interest rates causes annual growth rates of production to fall from 1.0% to −11.0% and sales to fall from 1.0% to −2.9% in the short run.

Date: 2019
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Citations: View citations in EconPapers (2)

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https://doi.org/10.1111/jmcb.12564

Related works:
Working Paper: Interest Rates and the Market for New Light Vehicles (2015)
Working Paper: Interest rates and the market for new light vehicles (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:51:y:2019:i:5:p:1137-1168

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