Published and Forthcoming Papers
When Trade Stops: Lessons from the 2007-2010 Gaza Blockade (Joint with Haggay Etkes). Journal of International Economics, Volume 95, Issue 1, January 2015, pp 16-27.
This paper uses detailed household expenditure and firm production data to study the welfare consequences of the blockade imposed on the Gaza Strip between mid 2007 and mid 2010. Using the West Bank trends as a counterfactual, we find that being removed from world markets reduced welfare by 14%-27% on average. Moreover, households with larger pre-blockade expenditure levels experienced disproportionally larger welfare losses. These effects are substantially larger than the predictions of standard trade models. We show that this large decline in welfare may be due to a combination of resource reallocation and reduced productivity. Using firm level data we find that the blockade triggered reallocation of workers across firms and sectors, especially from manufacturing to services, and from industries that use imported inputs intensively, or export. In addition, labor productivity fell sharply by 20% on average. This decline was however significantly higher in manufacturing (36%) than in services (0.6%). These findings suggest that access to world markets did not only determine the location of the Gaza economy on a given Production Possibility Frontier, but also determined the shape of this PPF.
Testing the Heckscher-Ohlin-Vanek Theory with a Natural Experiment Canadian Journal of Economics, Volume 52, Issue 1, February 2019, pp 58-92.
I use the historical episode of near-elimination of commuting from the West Bank into Israel to test three key predictions of the Heckscher- Ohlin-Vanek model of trade, and find strong support for them. On the production side, I use variation in commuting levels between districts, and find that wage changes were not correlated with the size of the shock to the labor force (Factor Price Insensitivity), and that districts that received larger influx of returning commuters shifted production more towards labor intensive industries (Rybczynski effect); On the consumption side, data are consistent with identical homothetic preferences, which, combined with the production results, supports the Heckscher-Ohlin-Vanek theorem on the factor content of trade.
Review of Arie Krampf, The Israeli Path to Neoliberalism: The State, Continuity and Change Israel Studies Review, Volume 34, Issue 1, Spring 2019: 165–167
Research Papers
Preferential Trading Agreements and Antidumping Duties
Do countries that enter Preferential Trade Agreements (PTAs) increase the level of protection against non members? If so - in what way? The theoretical literature on this question is divided. Most of the empirical literature on the issue focused on tariffs, finding mixed evidence. This paper focuses on the use of Anti-Dumping (AD) duties, a very flexible and increasingly popular protection measure. I find that following the creation of NAFTA, the U.S. increased the use of AD duties against non NAFTA members in sectors that were exposed to Mexican imports much more than in sectors that were not. I interpret these results as evidence that NAFTA caused an increase in the use of AD duties against non members.
Do Patent laws Encourage Innovation? Evidence from Economic History, 1851-1914 (Joint with Petra Moser)
This paper exploits substantial variation in 19th-century patent laws to investigate whether stronger patent laws encourage innovation. It also explores theoretical predictions, which indicate that countries with larger internal markets benefit more from stronger patent laws. Cross-country comparisons of exhibits and prizes at international fairs yield no evidence that countries with stronger patent rights were more innovative. Time series of U.S. patent grants to foreign nationals from 7 countries with substantial changes in domestic laws confirm that stronger patent laws had at best limited effects. There is some evidence that - for countries with higher levels of population and GDP - stronger patent laws are associated higher levels of innovation, but these results are almost exclusively driven by Russia, a large country with weak patent laws and low levels of innovation.