The Israeli Economy, 1995-2017: Light and Shadow in a Market Economy

Description

This book describes and analyses developments in the Israeli economy from 1995 to 2017. During this period, inflation was vanquished, the deficit in the balance of payments turned into a surplus, the public debt to GDP ratio sharply decreased, and unemployment has declined to an historical low. Nevertheless, the economy still suffers from many maladies: the productivity level is among the lowest in the developed world, and inequality has generally been on the rise. In the face of these threats to future growth and social cohesiveness, the question arises: has the reliance on market forces gone too far, and has the government retreated from its traditional tasks, tasks the private sector cannot (or does not) perform.

Avi Ben-Bassat is Professor Emeritus at the Department of Economics at The Hebrew University of Jerusalem. Reuben Gronau is Professor Emeritus at the Department of Economics at The Hebrew University of Jerusalem. Asaf Zussman is an Associate Professor at the Department of Economics at The Hebrew University of Jerusalem.

'In the past few decades, the Israeli economy became a global innovation powerhouse, drastically reduced its national Debt to GDP ratio, and brought unemployment down to a historic low. Yet poverty and inequality levels remain high, the cost of living is crushing young families, housing prices are soaring and congestion in the roads is appalling. This book explores in detail both the bright and dark sides of this uneven and perplexing performance and makes a great contribution to our understanding of fundamental trade-offs in economic and social policies, which characterize not just Israel but much of the western world. Ben-Bassat, Gronau, and Zussman deserve high praise for this magnificent volume.' Manuel Trajtenberg, Tel Aviv University 'The period 1995-2015 can be described as the Israeli economy's transition to adulthood. This transition was affected by strong external shocks - ranging from the second Intifada, which erupted in 2000, to the discoveries of natural gas, which started in 1999 - and sharp policy changes such as lowering tax rates and government spending from 2003 onwards. The volume tackles this complex period with 17 excellent chapters that analyze systematically its economic aspects.' Zvi Hercowitz, IDC Herzliya 'This book provides a fascinating perspective on Israel's transformation from a centrally planned society struggling to integrate waves of migrating tribes into a unified nation, to what it is today; a market-oriented society that applauds individualism and rewards success. This impressive collection of studies of the contemporary Israeli economy covers a wide range of aspects in society's well-being, from educational achievements and health to income, inequality, and growth. You do not need to be a long-time observer of Israel to learn from this book about the economics of the Israeli journey.' Yona Rubinstein, London School of Economics and Political Science