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Caspi I.,Bank of Israel | Caspi I.,Bar - Ilan University | Katzke N.,Stellenbosch University | Gupta R.,University of Pretoria
Energy Economics | Year: 2015

This paper sets out to date-stamp periods of historic oil price explosivity using the Generalized sup ADF (GSADF) test procedure developed by Phillips, Shi, and Yu (2013). The date-stamping procedure used in this paper is effective at identifying periodically collapsing bubbles; a feature found lacking with previous bubble detection methods. We set out to identify periods of oil price explosivity relative to the general price level and oil inventory supplies in the US since 1876 and 1920, respectively. The recursive identification algorithms used in this study identify multiple periods of price explosivity, and as such provides future researchers with a reference for studying the macroeconomic impact of historical periods of significant oil price build-ups. © 2015 Elsevier B.V.


Blumrosen L.,Hebrew University of Jerusalem | Zohar O.,Bank of Israel
Lecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics) | Year: 2015

We study the design of multilateral markets, where agents with several different roles engage in trade. We first observe that the modular approach proposed by D¨utting et al. [5] for bilateral markets can also be applied in multilateral markets. This gives a general method to design Deferred Acceptance mechanisms in such settings; these mechanisms, defined by Milgrom and Segal [10], are known to satisfy some highly desired properties. We then show applications of this framework in the context of supply chains. We show how existing mechanisms can be implemented as multilateral Deferred Acceptance mechanisms, and thus exhibit nice practical properties (as group strategy-proofness and equivalence to clock auctions). We use the general framework to design a novel mechanism that improves upon previous mechanisms in terms of social welfare. Our mechanism manages to avoid “trade reduction” in some scenarios, while maintaining the incentive and budget-balance properties. © Springer-Verlag Berlin Heidelberg 2015.


We estimate a small DSGE model by full information Bayesian techniques on the basis of Israeli data from 1995 to 2006. The model was first developed and estimated by means of classical GMM in Argov and Elkayam (2010), and since then it has been used at the Bank of Israel for monetary policy analysis. It is widely believed that in 2007 (out of sample year) as elsewhere worldwide, inflation rose in Israel due to high commodity prices in global markets. However, our baseline model attributes most of the high inflation in 2007 to supply shocks. One conjecture is that this model's result derives from the inappropriate original use of the unit value of imported consumer goods (which do not include unprocessed food and energy) as the main foreign price measure. We test this conjecture by re-estimating the model with various other foreign price measures that typically do reflect the global rise in commodity prices and compare the log-marginal likelihoods. We find that no other price measure outperforms the original choice in the sample period. Only the foreign trade-weighted CPI equals the performance of the original choice while improving the 2007 interpretation of inflation, and should therefore be considered the main foreign price measure. The proposed methodology for comparing the suitability of alternative measures for observable variables can be applied to any model with exogenous variables that are characterized by univariate equations. © 2011 Elsevier B.V.


Etkes H.,Bank of Israel
Peace Economics, Peace Science and Public Policy | Year: 2012

This study provides circumstantial evidence for the impact of permits for employment in Israel on the Palestinian labor force in the West Bank during the late Intifada period and its aftermath (2005-2008). The study utilizes a unique dataset that merges data from the Palestinian Labor Force Survey with Israeli administrative data on permits for employment in Israel. The study quantifies the increase in Palestinian employment in the Israeli and Palestinian economies and the decrease in Palestinian unemployment, as well as the drop in the return to schooling in a West Bank governorate, which coincided with an increase in the number of permits issued for residents of that governorate. These results reflect the short-run benefits for the un-skilled Palestinian labor force as well as the adverse long-run effects of Palestinian employment in Israel on human capital accumulation. Copyright © 2012 De Gruyter. All rights reserved.


Braude J.,Bank of Israel | Menashe Y.,Bank of Israel
Journal of International Trade and Economic Development | Year: 2011

The Asian miracle has been the focus of much research seeking to understand this extraordinary phenomenon. Ventura (Quarterly Journal of Economics 112: 57-84.) offers an explanation for the success of the Asian Tigers in sustaining exceptional growth rates over an extended period based primarily on capital accumulation. He points to their ability as export-oriented economies to exploit the accumulated capital to reallocate from labor-intensive to capital-intensive sectors instead of raising the capital intensity within each sector. We test this argument using industry-level data on manufacturing in 33 countries over three decades. The evidence on the argument is mixed. We identify two stages in the evolution of the structural change in the Tigers. It was labor-intensive initially and became capital-intensive only in the 1980s. Compared to other countries, the Tigers are exceptional in the extent of their shift from a labor-intensive to a capital-intensive structural change during the sample period. However, structural change in the 1980s accounted for only a negligible part of capital accumulation in manufacturing. © 2011 Taylor & Francis.

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