Fiat Lux and Crony Capitalism - The Impact of Monetary and Fiscal Policies in the Automobile Industry in USA and Europe from 2001 to 2010
DOI:
https://doi.org/10.52195/pm.v15i2.49Abstract
This paper focuses on detecting the short-term and long-term effects of monetary and fiscal policies on the US-American and European automotive market in the period from 2001 to 2010, looking at expansionary monetary policies, credit expansions, bail-outs and scrappage campaigns. The study aims to explain the reasons of the latest subprime-crisis, whose negative effects were in particular visible in the period from 2008 to 2010, using the Austrian Business Cycle theory to detect its validity for the automotive industry. As for fis-cal policies, the impact of incentives such as scrappage campaigns and other state interventions on the automotive industry will be critically evaluated. The target is to detect causalities, distinguishing between apparent symptoms and actual causes, to define whether artificial short-term economic booms caused by expansive monetary policies and public interventionism have ultimately led to the recent economic crisis. However, apart from empirically evaluating the impact of monetary and fiscal policies on the automotive sector within the men-tioned period, this paper also pretends to highlight the general crucial rele-vance of dynamic efficiency and entrepreneurial creativity and consequently the automotive OEMs’ need to detect market niches in order to optimize their company’s sustainability and competitiveness.
Keywords: Fiscal policies, monetary policies, automotive industry, credit expan-sion, fractional reserve banking, public incentives, bailouts, USA, Europe, Aus-trian Business Cycle Theory
JEL Classification: E12, E14, E32, E43, E51, E52, E62, E63, G33, H21, N12, N14
Resumen: Este trabajo se centra en detectar los efectos a corto y largo plazo de las políticas monetarias y fiscales en el mercado automotriz estadounidense y europeo en el período de 2001 a 2010, analizando las políticas monetarias expansivas, las expansiones de crédito, los ‘bailouts’ y las campañas de des-guace. El objetivo del estudio es explicar los orígenes de la última crisis sub-prime, cuyos efectos negativos fueron particularmente visibles en el período de 2008 a 2010, utilizando la teoría austriaca del ciclo económico para detectar su validez para la industria automotriz. En cuanto a las políticas fiscales, se evaluará críticamente el impacto de incentivos como las campañas de des-guace y otras intervenciones estatales en la industria automotriz. El objetivo es detectar causalidades, distinguiendo entre los síntomas aparentes y las causas reales, para definir si, en última instancia, el auge económico artificial, cau-sado por políticas monetarias expansivas y el intervencionismo estatal, con-dujo a la reciente crisis económica. Sin embargo, aparte de evaluar empíricamente el impacto de las políticas monetarias y fiscales en el sector automotriz dentro del período mencionado, este artículo también pretende resaltar la relevancia crucial general de la ‘eficiencia dinámica’ y la ‘creativi-dad empresarial’ y, en consecuencia, la necesidad de detectar nichos de mer-cado para optimizar la sostenibilidad y la competitividad de una empresa.
Palabras clave: políticas fiscales, políticas monetarias, industria automotriz, expansión de crédito, banca de reserva fraccionaria, incentivos públicos, res-cates, Estados Unidos, Europa, teoría austriaca del ciclo económico.
Clasificación JEL: E12, E14, E32, E43, E51, E52, E62, E63, G33, H21, N12, N14
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