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Trade policy in Palestine: A reassessment

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  • Missaglia, Marco
  • Valensisi, Giovanni

Abstract

The paper develops a CGE macro-model for Palestine, departing in three fundamental ways from the set-up applied in earlier studies. The present framework: (i) reformulates the modelling of fiscal policy in light of context-specific elements, including the absence of a government bond market and the incomplete transfer of revenues collected by Israel for the PNA; (ii) endogenizes private capital flows; (iii) postulates a demand-driven causality structure. Various policy scenarios are then assessed, with one crucial novelty: the overall effect of further trade liberalization turns out to be slightly contractionary, due to its fiscal implications.

Suggested Citation

  • Missaglia, Marco & Valensisi, Giovanni, 2014. "Trade policy in Palestine: A reassessment," Journal of Policy Modeling, Elsevier, vol. 36(5), pages 899-923.
  • Handle: RePEc:eee:jpolmo:v:36:y:2014:i:5:p:899-923
    DOI: 10.1016/j.jpolmod.2014.02.001
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    References listed on IDEAS

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    1. Marco Missaglia & Paul de Boer, 2004. "Food-For-Work versus Cash-For-Work: Emergency Assistance in Palestine," Economic Systems Research, Taylor & Francis Journals, vol. 16(4), pages 367-390.
    2. Lim, Jamus Jerome & Saborowski, Christian, 2010. "Estimates of trade-related adjustment costs in Syria," Journal of Policy Modeling, Elsevier, vol. 32(6), pages 843-864, November.
    3. Naqib, Fadle M., 2002. "Economic Aspects of the Palestinian-Israeli Conflict: The Collapse of the Oslo Accord," WIDER Working Paper Series 100, World Institute for Development Economic Research (UNU-WIDER).
    4. World Bank, 2007. "West Bank and Gaza - Public Expenditure Review : From Crisis to Greater Fiscal Independence, Volume 1," World Bank Other Operational Studies 7809, The World Bank.
    5. Botta, Alberto, 2010. "The Palestinian economy and its trade pattern: Stylised facts and alternative modelling strategies," MPRA Paper 29719, University Library of Munich, Germany.
    6. Bevan, David, 1999. "Trade Liberalization and the Budget Deficit," Journal of Policy Modeling, Elsevier, vol. 21(6), pages 653-694, November.
    7. Arnon, A & Weinblatt, J, 2001. "Sovereignty and Economic Development: The Case of Israel and Palestine," Economic Journal, Royal Economic Society, vol. 111(472), pages 291-308, June.
    8. Xiao-guang Zhang, 2006. "Armington Elasticities and Terms of Trade Effects in Global CGE Models," Staff Working Papers 0601, Productivity Commission, Government of Australia.
    9. Stephen Tokarick, 2010. "A Method for Calculating Export Supply and Import Demand Elasticities," IMF Working Papers 10/180, International Monetary Fund.
    10. Peter Lloyd & Xiao-guang Zhang, 2006. "The Armington Model," Staff Working Papers 0602, Productivity Commission, Government of Australia.
    11. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    12. Flaig, Dorothee & Siddig, Khalid H.A. & Grethe, Harald & Luckmann, Jonas & McDonald, Scott, 2011. "The Integration of Palestinian-Israeli Labour Markets: A CGE Approach," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103861, Agricultural and Applied Economics Association.
    13. Astrup Claus & Dessus Sebastien, 2005. "Exporting Goods or Exporting Labor?: Long-term Implications for the Palestinian Economy," Review of Middle East Economics and Finance, De Gruyter, vol. 3(1), pages 38-60, April.
    14. World Bank, 2007. "West Bank and Gaza Public Expenditure Review : From Crisis to Greater Fiscal Independence, Volume 2," World Bank Other Operational Studies 7807, The World Bank.
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    More about this item

    Keywords

    CGE models; Trade policy; Macroeconomics; Palestine;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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