Should the countries within the EU support the automotive industry? (2009:15epa)


The automotive industry has been hit hard by the global economic crisis and governmental financial support and rescue packages have been launched in different countries.

This European Policy Analysis by Rikard Forslid discusses the economic arguments for governmental support of the car industry. Can market failure or positive externalities motivate industry subsidies or are there strategic motives to support the automotive industry? In this case, what kind of support would be the most efficient?

The analysis is part of the research project Long-term Effects of the Economic Crisis.

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