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Title: |
Immiserising Factor Growth and the
Non-equivalence of Quotas and VERs |
| Author: |
Anam, Mahmudul;
Zandi, Farrokh R. |
| Author
Affiliation: |
York U; Brock U |
| Source: |
International Economic Journal, Autumn 1989, v. 3, no. 3, pp. 23-30 |
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Publication Date: |
Autumn 1989 |
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Abstract: |
In this paper we demonstrate that the
phenomenon of a negative shadow price can occur in the context of a
small open economy, if the quantitative restriction on imports is in the
form of a foreign voluntary export restraint (VER) rather than a
domestic import quota. The reason for this asymmetrical result is that
an immiserizing "terms of trade" effect is possible in the case of a VER
but not under a domestic import quota, since in the former quota rents
accrue to foreigners but in the latter become part of domestic income. |
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