The voluntary export restraint agreement (VER) limiting Japanese exports of cars to the US is evaluated. Extending a previous article dealing with Japanese transplant auto factories in the US, the authors examine impacts of alternative responses to the VER on the micro and macro level. The VER will result in a modest improvement in the bilateral trade balance. It will provide a small macroeconomic stimulus to the US economy, but will affect output in Japan adversely.
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Paper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number
199309.