Economic consequences of intifada

Paul de Boer and Marco Missaglia

No EI 2005-21, Econometric Institute Research Papers from Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute

Abstract: In 2003 the World Bank (WB) and the International Monetary Fund (IMF) published estimates of macro-economic indicators for 2002 of the economy of Palestine. WB used a micro-founded recursive dynamic computable general equilibrium (CGE) model, calibrated on the 1998 Social Accounting Matrix (SAM) of Palestine, to which shocks were applied, whereas IMF based its estimates on a macro-founded income-expenditure model relying on more recent data. It turned out that there were substantial differences: the estimate by WB of the real Gross National Income (at 1998 prices) was 25% less than the corresponding figure calculated by IMF. This huge difference is not only relevant for a full understanding of the economic consequences of the intifada, but also for the size of the international community intervention. In this paper we propose our own evaluation with the help of a static CGE model, based on the 1998 SAM and the so-called intifada shock derived from data of WB, that we constructed for the analysis of some forms of emergency assistance in a previous article. It turns out that our estimates, based on an entirely different methodology, are remarkably close to those of IMF.

Keywords: Palestine; computable general equilibrium model; macro-economic indicators (search for similar items in EconPapers)
Date: 2005-05-25
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Citations: View citations in EconPapers (3)

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