Varistor and method of producing the same

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A varistor has a varistor element body, and an external electrode disposed on the varistor element body. The varistor element body contains ZnO as a principal component, and a rare-earth metal. The external electrode has an electrode layer. The electrode layer is formed on an external surface of the varistor element body by simultaneous firing with the varistor element body. The electrode layer contains Pd.