This article analyzes the effects on the West Bank economy of temporary Palestinian employment in Israel, using a new database and a computable general equilibrium model. The results show that Palestinian employment in Israel increases household incomes but distorts the operation of the West...

CGE models usually assume extremes of factor mobility: factors either move between industries without cost or they do not move at all. With the assumption of mobile factors, simulations lead to reallocation of factors among different sectors of the economy which often vary strongly in factor...