Can a Periodic VER Raise Importing Country Welfare?

Omer Gokcekus

Journal of Economic Integration, 1997, vol. 12, 485-504

Abstract:

Several authors have argued that if exporting firms anticipate a voluntary expor t restriction in a future period, and they expect VERs to be allocated in p ro p o rtion to past exports, then they have an incentive to dump in the earlier period. In this paper we ask: How does a regime characterized by periodic VERs affect aggregate welfare, consumer welfare and import-competing pro - ducer welfare in the importing country? We discover paradoxically, that the answers are all uncertain. However, such a regime always shrinks worldwide efficiency, and normally, for the importer it shrinks aggregate welfare and consumer welfare and raises producer welfare.

Keywords: Periodic; VER (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Date: 1997
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Working Paper: Can a Periodic VER Raise Importing Country Welfare? (1996)
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