Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/90446
Authors: 
Ihle, Rico
Götz, Linde
Rubin, Ofir D.
Year of Publication: 
2011
Series/Report no.: 
Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 100
Abstract: 
The Israeli-Palestinian conflict constitutes a prominent example of a long-lasting political conflict which has major consequences for the livelihoods of the people on both sides. The agricultural sectors of the Palestinian and Israeli economies are tightly connected. However, various security measures occasionally implemented in consequence of the political conflict between Israelis and Palestinians strongly inhibit the movement of people and commodities. In order to obtain evidence on the impacts of such abrupt trade impediments on price dynamics, we estimate a vector error correction model in state space form employing the Kalman filter. The time-varying cointegration parameters suggest that the security measures indeed impacted price interdependencies on a short-term scale.
Subjects: 
cointegration
error correction
Israel
Palestinian territories
price transmission
state space model
time-varying parameters
JEL: 
C32
D74
Q11
Q13
F15
Document Type: 
Working Paper

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