Political Events and Economic Trends: The Effects of the Intifada on the Israeli Economy

The natural flows of economic activities are often disturbed by political-military exogenous events that cause the various economic activities to change course. Such an event was the uprising - Intifada - that started in December 1987 in the West Bank and Gaza, WBG, and affected the economy of these areas as well as that of Israel. In this study we perform an econometric analysis that was aimed at detecting the change of levels and trends of the various real economic activities in Israel. The same time dependent behavioral model was applied to all activities. The findings indicate that the intifada did have significant effects, from the statistical point of view, on most economic activities. The exceptions are various export activities