Us vehicles sales. Evidence of persistence after COVID-19

Abstract

In this paper, the sales of vehicles in the US are examined to understand if the shock caused by the current COVID-19 pandemic has had permanent or transitory effects on its subsequent evolution. Using monthly data from January 1976 until April 2021 and fractional integration methods, our results indicate that the series reverts and the shocks tend to disappear in the long run, even when they appear to be long lived. The results also indicate that the COVID-19 pandemic has not increased the degree of persistence of the series but, unexpectedly, has slightly reduced its dependence. Thus, shocks are transitory, long lived but, as time goes by, the recovery seems to be faster, which is possibly a sign of the strength of the industry.