In an earlier posting, I noted that the "cash-for-clunkers" program might result in an increase in uncertainty for car buyers - and a temporary decline in sales while people wait for the program to be implemented.
Well, the June car sales figures are in, and as a story in the Washington Post relates:
But it does speak to the need to carefully look at effects of the transition periods while new programs are being implemented. Another case in point is the new credit card regulations -- where companies are raising rates before the new law can take effect (see story in Washington Post).
As I said earlier, this is all a great opportunity for the behavioral economists to make an important contribution to economic policymaking.
Well, the June car sales figures are in, and as a story in the Washington Post relates:
Economists say consumers are warily making purchases again. Yet some held off last month, as Congress rallied to pass the "cash for clunkers" bill, which gives consumers vouchers to purchase new, more fuel-efficient cars and trucks when they trade in older models. "It certainly put some people on the sidelines," said Mark LaNeve, GM North America vice president of sales, service and marketing.Don't get me wrong - I think the program is a good idea. And Congress is to be praised for enacting the program quickly. An extended debate would likely have hurt sales even more.
But it does speak to the need to carefully look at effects of the transition periods while new programs are being implemented. Another case in point is the new credit card regulations -- where companies are raising rates before the new law can take effect (see story in Washington Post).
As I said earlier, this is all a great opportunity for the behavioral economists to make an important contribution to economic policymaking.
Cash for Clunkers is too short term to have any effect on either car sales or the environment.