Asset Market Perspectives on the Israeli-Palestinian Conflict

This paper locates turning points in the Israeli-Palestinian conflict since the late 1980s using asset market data from Israel and the Palestinian Authority (PA). We find that major escalations in violence, such as the outbreak of the Intifada in 2000, lead to significant declines in asset prices in...

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Bibliographic Details
Published in:Economica (London) 2008-02, Vol.75 (297), p.84-115
Main Authors: ZUSSMAN, ASAF, ZUSSMAN, NOAM, NIELSEN, MORTEN ØRREGAARD
Format: Article
Language:English
Subjects:
Arab-Israeli conflict
Asset markets
Assets
Civil wars
Conflict
Economic impact analysis
Financial research
Israel
Palestinian Authority
Palestinians
Peace
Peace treaties
Political conflict
Prices
Prime ministers
Roadmaps
Stock exchange
Stock exchanges
Stock market indices
Stock markets
Stock prices
Studies
Terrorism
Violence
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Summary:This paper locates turning points in the Israeli-Palestinian conflict since the late 1980s using asset market data from Israel and the Palestinian Authority (PA). We find that major escalations in violence, such as the outbreak of the Intifada in 2000, lead to significant declines in asset prices in both Israel and the PA. Conversely, major peace initiatives, such as the Oslo accords in 1993 and the Road Map plan in 2003, lead to substantial increases in asset prices on both sides of the conflict. An additional novel finding is that asset markets respond positively to the success of politicians who favour a negotiated settlement to the conflict.
ISSN:0013-0427
1468-0335
DOI:10.1111/j.1468-0335.2007.00607.x