Can Political Instability Generate Business Cycles? Evidence from the Intifada.
reportposted on 25.03.2009, 16:01 by David Fielding
This paper presents an econometric model that combines macroeconomic time series data with historical series relating to political instability in Israel during the Intifada period, in order to provide a conservative estimate of the extent to which variations in economic performance over time have a political explanation. Political instability is found to have a substantial effect on the cyclical component of aggregate output.