International trade and the U.S. automobile industry: Current research, issues, and questions

Abstract

This paper has dual goals. On the one hand, it attempts a review of recent econometric work on the U.S. automobile industry. Three studies of this industry are reviewed, compared, and contrasted. These are studies by Koujianou Goldberg [Koujianou Goldberg, P., 1993, U.S. trade policy implications of a new approach to modelling the demand for automobiles, mimeo (Princeton University)], Feenstra and Levinsohn [Feenstra, R. and J. Levinsohn, 1994, Estimating markups and market conduct with multidimensional product attributes, Review of Economic Studies, forthcoming] and Berry et al. [Berry, S., J. Levinsohn and A. Pakes, 1994, Automobile prices in market equilibrium, Econometrica, forthcoming]. On the other hand, a number of current policy issues facing the industry are also reviewed. These issues include the Voluntary Export Restraint applying to exports from Japan, the NAFTA, anti-dumping law, and industry globalization. The paper provides a broad overview, then, of econometric and policy issues as they relate to the U.S. automobile industry.