The Review of Economics and Statistics Vol. 70 No. 3 1988
Effects of the U.S.-Japan Auto VER on European Prices and on U.S. Welfare
Abstract
This paper highlights the impact of voluntary export restrictions (VERs) on the nonrestricted supplier by investigating the effect of the U.S.-Japan auto VER on the behavior of European producers. Using three independent approaches (supply functions, hedonic regressions, and casual evidence), it shows that European producers raised prices by nearly one third. U.S. welfare loss to Europe ($3.4 billion in 1984) actually exceeded its loss to Japan ($2.4 billion), and the small social loss within the United States. Total annual cost of a job saved in the industry was $181, 000.
- DOI
- 10.2307/1926787
- Volume
- 70
- Issue
- 3
- Pages
- 484
- Sources
- openalex crossref