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Dornbusch’s Law

In 2016 there was a 5-year time frame suggested for the changes needed in the industry to repair cars properly. If these changes were not made there could very well be a real crisis in the industry.

In 2021 these changes have not been made, but the crisis has not yet arrived. This does not mean that the 2016 prediction was wrong—just that it was off by a year or two.

Economists recognize that there is a lot more to finance than just numbers, and many of their principles apply to a very broad range of circumstances and behaviour. 

Rudi Dornbusch was an economist who worked at several prestigious American universities from the 70s to the early 2000s. Students of international macroeconomics are fond of quoting “Dornbusch’s Law.” 

It is not a rigorous statement and there are many versions with slightly different wording. One of the most concise is;

“Crises take longer to arrive than you can possibly imagine, but when they do come, they happen faster than you can possibly imagine”.

Dornbusch was certainly not thinking of the collision repair industry of 2021 when he wrote this, but it applies exactly. Those progressive operators who have been preparing for many years and are repairing cars properly now will not be taken by surprise.

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