This book, originally published in 1994, explores the effects of federal policies on the US auto industry in the 1970s and 80s which were designed to save jobs and help the domestic industry become more competitive. The author develops a new model based on modern oliopoly theory to estimate the effects of the voluntary Restraint Agreements (which limited Japanese imports) on the US auto market. The results demonstrate that VRAs caused price increases which adversely affected the comptitiveness of US producers. On the eve of a new Trump administration, and the likelihood of new restrictions on imports to boost US manufacturing, this book has particular enduring relevance.
Table of Contents
Preface. 1. Introduction A: An Alternative Policy Approach: The Stakeholder Model B: Domestic Employment and Oligopoly Behaviour in the U.S. Auto Industry 2. Background and Literature Review A: The Structure of Power in the U. S. Motor Vehicle Indsutry B: Shifiting Patterns of Vehicle Demand and Rising Imports C: The Effects of Trade on Employment 3. The Model A: The Baker and Bresnahan Model B: A Residual Demand Model for the U.S. Auto Industry 4. Data Generation and Historical Analysis A: Macroeconomic Variables B: Auto Output and Price Levels C: Factor Costs D: Output Shares and Prices in the US Automobile Market 5. Model Estimation A: Fuel Economy Regulations B: Estimation C: Resutls D: Firm-level Results E: Summary 6. Simulation and Policy Analysis A: Model Simulation B: Simulation Results C: Total Output and Employment Impacts of the VRAs 7. Public Policy for the Auto Industry A: The VRAs and Transplant Production in the US B: Employment Prospects for the US Auto Industry C: The Impacts of Alternative Policies D: Market Structure and Efficiency E: Summary