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Dissertation/Thesis Abstract

The Political Economy of Growth and Distribution in Palestine: History, Measurement, and Applications
by Shikaki, Ibrahim, Ph.D., The New School, 2019, 177; 13884472
Abstract (Summary)

This dissertation consists of three chapters that explore matters of distribution and growth in Palestine during the last 50 years. Rather than follow a limited neoclassical approach that merely explores mechanisms of markets, the dissertation applies a political economy approach; one that takes into account issues of class, power, politics, society and money. Whilst the overarching theme is distribution and growth, the methodology applied is eclectic. The first chapter utilizes an economic history narrative; the second focuses on data and measurement; while the final chapter provides a formal macroeconomic growth model.

The first chapter offers a historical, descriptive narrative of the Palestinian economy. The chapter features four routes normally missing in mainstream economic research. First, it uses a dependency lens to explain Palestinian-Israeli economic relations. Second, it examines the dynamics of class formation within Palestinian society during the time-period. Third, it discusses the economic interests of Israel vis-à-vis the Palestinian economy. Fourth, it recognizes the crucial role of history and path dependency by examining the era prior to 1967 including the British Mandate (1920–1947).

The second chapter studies the functional distribution of income and provides the first ever time-series of the labor share in the Palestinian economy for the period 1972–2015. The Palestinian case-study is used to demonstrate shared challenges developing countries face when estimating the labor share. These challenges include the size of self-employment; the absence of income-based approach to measuring national accounts and GDP; and the need to differentiate between national and domestic shares when a sizable portion of the labor force works outside the domestic economy. To overcome these challenges, the paper puts forth several approximations of the labor share, relying on data from the Economic Survey Series and Labor Force Surveys from both Palestinian and Israeli data sources.

The third chapter offers a simple, demand-driven Kaleckian growth model to portray an investment constrained Palestinian economy. It follows Botta and Vaggi (2012) who postulate the Israeli movement restrictions as an external third claimant on income (after wages and profit). Unlike the aforementioned authors, who assume that capitalists passively accept the full burden of the restrictions on their profitability, the chapter assumes capitalists channel the burden to workers via the nominal wage, and studies the impact. The chapter finds that shifting the distributional impact of movement restrictions has a significant impact on the equilibrium levels of capacity utilization, growth rate, as well as the sign of the key derivative for the model.

Indexing (document details)
Advisor: Setterfield, Mark
Commitee: Foley, Duncan, Chen, Ying, Ginges, Jeremy
School: The New School
Department: Economics
School Location: United States -- New York
Source: DAI-A 81/2(E), Dissertation Abstracts International
Subjects: Economics, Economic history, Middle Eastern Studies
Keywords: Development, Distribution, Kaleckian, Macroeconomics, Palestine, Political economy
Publication Number: 13884472
ISBN: 9781085601283
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