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This paper highlights the impact of voluntary export restrictions (VERs) on the nonrestricted supplier by investigating the effect of the U.S.-Japan auto VER on the behavior of European producers. Using three independent approaches (supply functions, hedonic regressions, and casual evidence), it shows that European producers raised prices by nearly one third. U.S. welfare loss to Europe ($3.4 billion in 1984) actually exceeded its loss to Japan ($2.4 billion), and the small social loss within the United States. Total annual cost of a job saved in the industry was $181,000. Copyright 1988 by MIT Press.

This paper provides empirical estimates of the "static" effect of European integration on trade flows in manufactured products. Folloeing a general discussion of the topic in section A, section B presents statistical tabulations of trade flows accompanied by a measure of increased intra-industry specialization within Europe. Section C is devoted to a survey of the approaches used in measuring trade creations and diversion resulting from regional integration (in the Viner-Meade tradition), while section D presents empirical estimates of these effects, each calculated by two or more methods. Published in connection with a visit at the IIES

Published in connection with a visit at the IIES