IDEAS home Printed from
   My bibliography  Save this paper

Voluntary Trade Restraints and Economic Welfare


  • Kotaro Suzumura
  • Jota Ishikawa


The purpose of this paper is to examine the welfare implications of voluntary trade restraints in the context of duopoly with product differentiation. It is shown that, irrespective of whether firms compete in quantities or prices, a voluntary export restraint (VER) set at the free trade equilibrium level of foreign exports lowers domestic welfare if and only if it induces the foreign firm to comply voluntarily with the VER. We also examine the welfare implications of a voluntary import expansion (VIE), which is the import side counterpart of a VER. It is shown that the imposition of a VIE is at least as harmful as the imposition of a VER from the point of view of social welfare.

Suggested Citation

  • Kotaro Suzumura & Jota Ishikawa, 1993. "Voluntary Trade Restraints and Economic Welfare," Discussion Paper Series a272, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hit:hituec:a272

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    1. Meese, Richard A. & Rogoff, Kenneth, 1983. "Empirical exchange rate models of the seventies : Do they fit out of sample?," Journal of International Economics, Elsevier, vol. 14(1-2), pages 3-24, February.
    2. Wei, Shangjin, 1991. "Price volatility without news about fundamentals," Economics Letters, Elsevier, vol. 37(4), pages 453-458, December.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Calzolari, Giacomo & Lambertini, Luca, 2007. "Export restraints in a model of trade with capital accumulation," Journal of Economic Dynamics and Control, Elsevier, vol. 31(12), pages 3822-3842, December.

    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hit:hituec:a272. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hiromichi Miyake). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.