In this paper, we assess the influence of the U.S. BEA series “value of motor vehicle output” on the rest of the economy over the period 1968-2007.  We statistically assess the causal relationship between real motor vehicle output (RMVO) and real gross domestic product (RGDP) less RMVO, called RGDP except RMVO, or RGDPX.  This is accomplished by standard estimation and statistical methods used to assess vector autoregressive models.  Over a few quarters we find strong evidence of one direction of causality (in the sense of Granger) from RMVO to RGDPX

Given this finding, we construct a forecasting version of the model that RMVO causes RGDPX and examine the magnitude and timing of coefficients.  We evaluate the statistical evidence for the existence and magnitude of a multiplier effect.  We also evaluate the stability of the coefficients for selected segments of the time series. JEL classification: C22; C53; E17; E32; L91

Danilo J. Santini, Senior Economist

Section Leader, Technology Analysis

Center for Transportation Research

Argonne National Laboratory955 L’Enfant Plaza SW
Suite 6000
Washington DC 20024-2112
(DC) Phone: 202 488 2431
(DC) Fax: 202 488 2413
E-mail: dsantini@anl.gov

David A Poyer, Ph.D.

Associate Professor of Economics

Morehouse College

830 Westview Dr. SW

Atlanta, GA 30314

Phone: 404 681 2800, ext. 2553

E-mail: dpoyer@morehouse.edu Submitted to the International Atlantic Economic Society to be considered for presentation at the

THE 66th INTERNATIONAL ATLANTIC ECONOMIC CONFERENCE
Montreal Canada
October 9-12 2008