Summary
America’s automobile manufacturing industry demonstrates the
importance of maintaining a competitive value for the U.S. dollar. Using empirical
data for the last 35 years, this note shows that, when foreign-made cars become
significantly cheaper because the dollar’s value has risen, most consumers can
and do purchase alternative foreign cars, and domestic producers lose market
share.[i]
The future for America’s motor vehicle manufacturing
industry – and for the domestic durable goods production in general – depends heavily on establishing and
maintaining a competitive exchange rate for the U.S. dollar – something that
America has not done for about forty years!
