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Quantitative restrictions, unempolyment and welfare

  • Chi-Chur Chao
  • Eden Yu

This paper explores the effects of import quotas and voluntary export restraints (VER) on employment and welfare of an economy plagued by generalized unemployment due to wage rigidity. The welfare effects of quotas and VER in the presence of unemployment are compared with those derived in the traditional full employment model. We show that a tightening of quotas or VER may improve welfare. Copyright Kluwer Academic Publishers 1991

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File URL: http://hdl.handle.net/10.1007/BF01886901
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Article provided by Springer in its journal Open Economies Review.

Volume (Year): 2 (1991)
Issue (Month): 2 (June)
Pages: 211-217

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Handle: RePEc:kap:openec:v:2:y:1991:i:2:p:211-217
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  1. Young, Leslie, 1979. "Ranking optimal tariffs and quotas for a large country under uncertainty," Journal of International Economics, Elsevier, vol. 9(2), pages 249-264, May.
  2. Brecher, Richard A., 1974. "Optimal commercial policy for a minimum-wage economy," Journal of International Economics, Elsevier, vol. 4(2), pages 139-149, May.
  3. Batra, Raveendra N & Naqvi, Nadeem, 1987. "Urban Unemployment and the Gains from Trade," Economica, London School of Economics and Political Science, vol. 54(215), pages 381-95, August.
  4. Yu, Eden S H, 1982. "Unemployment and the Theory of Customs Unions," Economic Journal, Royal Economic Society, vol. 92(366), pages 399-404, June.
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