Abstract
Recently, Jans, Wall and Hariharan demonstrated that there may exist an incentive for a welfare-maximizing government that normally prefers free trade to maintain a protectionist reputation by imposing a voluntary export restraint, We show in the context of their model, which postulates a small supplying industry, that a welfare-maximizing government (their assumption) which is also distributionally indifferent (our assumption) will never wish to maintain a protectionist reputation by imposing a VER. Moreover, even if the supplying industries are large, imposing a VER will immiserize the importing country unless the demand or supply curve is non-linear.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
