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A Retrospective Look at Rescuing and Restructuring General Motors and Chrysler


  • Austan D. Goolsbee
  • Alan B. Krueger


The rescue of the US automobile industry amid the 2008-2009 recession and financial crisis was a consequential, controversial, and difficult decision made at a fraught moment for the US economy. Both of us were involved in the decision process at the time, but since have moved back to academia. More than five years have passed since the bailout began, and it is timely to look back at this unusual episode of economic policymaking to consider what we got right, what we got wrong, and why. In this article, we describe the events that brought two of the largest industrial companies in the world to seek a bailout from the US government, the analysis that was used to evaluate the decision (including what the alternatives were and whether a rescue would even work), the steps that were taken to rescue and restructure General Motors and Chrysler, and the performance of the US auto industry since the bailout. We close with general lessons to be learned from the episode.

Suggested Citation

  • Austan D. Goolsbee & Alan B. Krueger, 2015. "A Retrospective Look at Rescuing and Restructuring General Motors and Chrysler," Journal of Economic Perspectives, American Economic Association, vol. 29(2), pages 3-24, Spring.
  • Handle: RePEc:aea:jecper:v:29:y:2015:i:2:p:3-24 Note: DOI: 10.1257/jep.29.2.3

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    References listed on IDEAS

    1. James Tobin, 1955. "A Dynamic Aggregative Model," Journal of Political Economy, University of Chicago Press, vol. 63, pages 103-103.
    2. R. M. Cyert & J. G. March, 1959. "Reply," The Quarterly Journal of Economics, Oxford University Press, vol. 73(4), pages 684-685.
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    Cited by:

    1. Efraim Benmelech & Ralf R. Meisenzahl & Rodney Ramcharan, 2017. "The Real Effects of Liquidity During the Financial Crisis: Evidence from Automobiles," The Quarterly Journal of Economics, Oxford University Press, vol. 132(1), pages 317-365.
    2. Peter Temin, 2015. "The American Dual Economy: Race, Globalization, and the Politics of Exclusion," Working Papers Series 26, Institute for New Economic Thinking.

    More about this item

    JEL classification:

    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment


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