Macroeconomics of the New and the Used Car Markets
AbstractThe new cars of today are used cars of tomorrow and some people assume a competition between new and used markets. There are numerous, preconceived ideas and academic theories regarding the interactions between primary and secondary markets. To investigate the relations, we provide a macroeconomic analysis of the French, the British and the US car markets. We aim at answering the following questions. What are the interactions between the new and the second-hand car markets? Can we use the interactions to estimate the car prices of tomorrow? Our results indicate that the relations appear limited for France and the UK, whereas the US market faces a Scitovscky mechanism, defined by constant disequilibrium and multiple interactions between primary and secondary markets. Furthermore, they illustrate that the interrelations are not strong enough to fully explain and forecast market patterns.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 30 (2010)
Issue (Month): 3 ()
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second-hand market; automotive market; prices; causality; cyclical correlations; VAR.;
Find related papers by JEL classification:
- E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
- C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
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