When trade stops: Lessons from the Gaza blockade 2007–2010

Haggay Etkes and Assaf Zimring

Journal of International Economics, 2015, vol. 95, issue 1, 16-27

Abstract: This paper uses detailed household expenditure and firm production data to study the welfare consequences of the blockade imposed on the Gaza Strip between mid-2007 and mid-2010. Using the West Bank as a counterfactual economy, we find that welfare declined by 14%–27%. Moreover, households with larger pre-blockade expenditure levels experienced larger welfare losses. We show that this large decline in welfare may be due to a combination of resource reallocation and reduced productivity. Workers were reallocated from manufacturing to services, and from industries that use imported inputs intensively, or export. In addition, labor productivity fell by 20% on average.

Keywords: Gains from trade; Economic sanctions; Gaza Strip (search for similar items in EconPapers)
JEL-codes: F00 F11 F14 F51 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (38)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:95:y:2015:i:1:p:16-27

DOI: 10.1016/j.jinteco.2014.10.005

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