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Carwars: Trying to Make Sense of U.S.-Japan Trade Frictions in the Automobile and Automobile Parts Markets

In: The Effects of U.S. Trade Protection and Promotion Policies

Author

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  • James Levinsohn

Abstract

This paper tries to make sense of the recent trade dispute between the U.S. and Japan in autos and auto parts. The paper argues that there are structural differences between the way that the auto industries are organized in the U.S. and Japan, and that these differences have contributed to the growing bilateral trade deficit in auto parts. The paper also provides econometric estimates of what would have happened had the threatened 100 percent tariff on Japanese luxury cars not been withdrawn by the U.S.
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Suggested Citation

  • James Levinsohn, 1997. "Carwars: Trying to Make Sense of U.S.-Japan Trade Frictions in the Automobile and Automobile Parts Markets," NBER Chapters,in: The Effects of U.S. Trade Protection and Promotion Policies, pages 11-32 National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:0307
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    References listed on IDEAS

    as
    1. Steven Berry & James Levinsohn & Ariel Pakes, 1995. "Voluntary Export Restraints on Automobiles: Evaluating a Strategic TradePolicy," NBER Working Papers 5235, National Bureau of Economic Research, Inc.
    2. Pakes, Ariel S, 1986. "Patents as Options: Some Estimates of the Value of Holding European Patent Stocks," Econometrica, Econometric Society, vol. 54(4), pages 755-784, July.
    3. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-890, July.
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    Citations

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    Cited by:

    1. Krishna, Kala & Morgan, John, 1998. "Implementing results-oriented trade policies: The case of the US-Japanese auto parts dispute," European Economic Review, Elsevier, vol. 42(8), pages 1443-1467, September.
    2. Avik Chakrabarti, 2003. "Import competition, employment and wage in US manufacturing: new evidence from multivariate panel cointegration analysis," Applied Economics, Taylor & Francis Journals, vol. 35(13), pages 1445-1449.
    3. Robert M. Stern, 1996. "The Trade Policy Review of Japan," The World Economy, Wiley Blackwell, vol. 19(Supplemen), pages 133-155, November.

    More about this item

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • F1 - International Economics - - Trade

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