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Asset Market Perspectives on the Israeli-Palestinian Conflict

Author

Listed:
  • Asaf Zussman
  • Noam Zussman

    (Bank of Israel)

  • Morten Nielsen

Abstract

The Israeli-Palestinian conflict has played a salient role in world affairs in recent decades. This paper locates turning points in the conflict since the late 1980s using asset market data from Israel and 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 favor a negotiated settlement to the conflict.

Suggested Citation

  • Asaf Zussman & Noam Zussman & Morten Nielsen, 2006. "Asset Market Perspectives on the Israeli-Palestinian Conflict," Bank of Israel Working Papers 2006.02, Bank of Israel.
    • Handle: RePEc:boi:wpaper:2006.02
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    References listed on IDEAS

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    More about this item

    Keywords

    Foreign Exchange Market; Israeli Palestinian Conflict; Stock Market; Structural Breaks; Turning Points;
    All these keywords.

    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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