Do Palestinian workers' remittances from Israel matter for the Palestinian economy?

Abstract

This paper studies the impact of Palestinian workers' remittances from Israel on Palestinian economic growth using quarterly data over the period 2000-2016. Stationary and cointegration tests as well as a vector error correction model are applied for such purpose. Cointegration tests provide evidence of a long-run positive equilibrium relationship between remittances and output growth. Results also indicate that remittances have influence on Palestinian economic development at both short-and long-run level.