Macroeconomic Effects Of Terrorist Shocks In Israel
This paper estimates a structural vector autoregression to assess the empirical effects of terrorism on output and prices in Israel. Long-run restrictions are used to interpret the effects in terms of aggregate demand and supply curves. The responses indicate that the immediate effects of terrorism are similar to those associated with a negative demand shock. Such a leftward shift of the aggregate demand curve is consistent with the existence of adverse effects on most components of aggregate expenditure documented in previous empirical studies. The long-term consequences of terrorism are similar to those related to a negative supply shock. Such a leftward shift of the long-run aggregate supply curve agrees with adverse effects on the determinants of the potential output, such as contractions of physical capital highlighted in earlier work, as well as reductions of technological innovations and slowdowns of net immigrations, which have not been fully analyzed in the existing empirical literature.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 21 (2010)
Issue (Month): 4 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/GDPE20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/GDPE20|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Knight, Malcolm & Loayza, Norman & Villanueva, Delano, 1996.
"The peace dividend : military spending cuts and economic growth,"
Policy Research Working Paper Series
1577, The World Bank.
- Malcolm Knight & Norman Loayza & Delano Villanueva, 1996. "The Peace Dividend: Military Spending Cuts and Economic Growth," IMF Staff Papers, Palgrave Macmillan, vol. 43(1), pages 1-37, March.
- Malcolm D. Knight & Delano Villanueva & Norman Loayza, 1995. "The Peace Dividend; Military Spending Cuts and Economic Growth," IMF Working Papers 95/53, International Monetary Fund.
- Nankervis, John C., 2005. "Computational algorithms for double bootstrap confidence intervals," Computational Statistics & Data Analysis, Elsevier, vol. 49(2), pages 461-475, April.
- S. Brock Blomberg & Gregory D. Hess, 2004.
"How Much Does Violence Tax Trade?,"
CESifo Working Paper Series
1222, CESifo Group Munich.
- Gupta, Sanjeev & Clements, Benedict & Bhattacharya, Rina & Chakravarti, Shamit, 2004. "Fiscal consequences of armed conflict and terrorism in low- and middle-income countries," European Journal of Political Economy, Elsevier, vol. 20(2), pages 403-421, June.
- Jordi Galí, 1992. "How Well Does The IS-LM Model Fit Postwar U. S. Data?," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 709-738.
- Abadie, Alberto, 2004.
"Poverty, Political Freedom, and the Roots of Terrorism,"
Working Paper Series
rwp04-043, Harvard University, John F. Kennedy School of Government.
- Alberto Abadie, 2006. "Poverty, Political Freedom, and the Roots of Terrorism," American Economic Review, American Economic Association, vol. 96(2), pages 50-56, May.
- Alberto Abadie, 2004. "Poverty, Political Freedom, and the Roots of Terrorism," NBER Working Papers 10859, National Bureau of Economic Research, Inc.
- Alan B. Krueger & Jitka Maleckova, 2002. "Education, Poverty, Political Violence and Terrorism: Is There a Causal Connection?," NBER Working Papers 9074, National Bureau of Economic Research, Inc.
- Eckstein, Zvi & Tsiddon, Daniel, 2004.
"Macroeconomic consequences of terror: theory and the case of Israel,"
Journal of Monetary Economics,
Elsevier, vol. 51(5), pages 971-1002, July.
- Eckstein, Zvi & Tsiddon, Daniel, 2004. "Macroeconomic Consequences of Terror: Theory and the Case of Israel," CEPR Discussion Papers 4427, C.E.P.R. Discussion Papers.
- Olivier Jean Blanchard & Danny Quah, 1988.
"The Dynamic Effects of Aggregate Demand and Supply Disturbance,"
497, Massachusetts Institute of Technology (MIT), Department of Economics.
- Blanchard, Olivier Jean & Quah, Danny, 1989. "The Dynamic Effects of Aggregate Demand and Supply Disturbances," American Economic Review, American Economic Association, vol. 79(4), pages 655-73, September.
- Olivier Jean Blanchard & Danny Quah, 1988. "The Dynamic Effects of Aggregate Demand and Supply Disturbances," NBER Working Papers 2737, National Bureau of Economic Research, Inc.
- David Fielding, 2003. "Modelling Political Instability and Economic Performance: Israeli Investment during the "Intifada"," Economica, London School of Economics and Political Science, vol. 70(277), pages 159-186, February.
- Lutz Kilian, 1998. "Small-Sample Confidence Intervals For Impulse Response Functions," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 218-230, May.
- Eldor, Rafi & Melnick, Rafi, 2004. "Financial markets and terrorism," European Journal of Political Economy, Elsevier, vol. 20(2), pages 367-386, June.
- S. Brock Blomberg & Gregory D. Hess & Athanasios Orphanides, 2004.
"The Macroeconomic Consequences of Terrorism,"
CESifo Working Paper Series
1151, CESifo Group Munich.
- Nitsch, Volker & Schumacher, Dieter, 2004. "Terrorism and international trade: an empirical investigation," European Journal of Political Economy, Elsevier, vol. 20(2), pages 423-433, June.
When requesting a correction, please mention this item's handle: RePEc:taf:defpea:v:21:y:2010:i:4:p:317-336. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.