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Asset Market Perspectives on the Israeli–Palestinian Conflict

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  • ASAF ZUSSMAN
  • NOAM ZUSSMAN
  • MORTEN ØRREGAARD NIELSEN

Abstract

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.

Suggested Citation

  • Asaf Zussman & Noam Zussman & Morten Ørregaard Nielsen, 2008. "Asset Market Perspectives on the Israeli–Palestinian Conflict," Economica, London School of Economics and Political Science, vol. 75(297), pages 84-115, February.
  • Handle: RePEc:bla:econom:v:75:y:2008:i:297:p:84-115
    DOI: 10.1111/j.1468-0335.2007.00607.x
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    More about this item

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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