The purpose of this paper is to provide empirical answers to questions related to the propagation of shocks in a high-inflation economy. Do one-time inflationary shocks give rise to long-term persistence, or inertia? Do balance of payments' shocks trigger a process that, through indexation and...

On July 1 the Israeli government adopted a comprehensive emergency program for stabilization and recovery which has had dramatic consequences, at least in the very short-run. Within a few months inflation was down to 1-2 percent a month, foreign exchange reserves were rising rapidly andin spite...

The rate of inflation in Israel increased from 8 percent in 1965 to 300-400 percent in the first half of 1984. The inflationary process until 1977 was not qualitatively different from that in the OECD countries, but after the financial liberalization of 1977 the economy appeared to move into a...

The paper applies an aggregate supply and demand framework for the study of Israel's brand of stagflation. After a very rapid growth period between 1967-1973 Israel's subsequent share growth slowdown and accelerated inflation seem particularly marked by any international comparison. The...

On the basis of a comparative growth analysis of ten major industrial countries, it is shown that the productivity slowdown of the 1970s can be attributed to a combination of the energy and raw material price shocks and the contractionary macroeconomic policies that were followed in response to...

A factor-price frontier framework is used to clarify the analogy of an increase (decrease) in raw material prices with that of autonomous technological regress (progress). Factor-price profiles estimated for the United States, the United Kingdom, Germany, and Japan bring out the major role of...

This essay offers an economic-history perspective of the long struggle towards macroeconomic stability. The paper is a broad analytical overview of major exogenous shocks and shifts in macroeconomic policy and institutions in Israel since the 1977-1985 great inflation through the global...

Large capital inflows are understandably viewed as dangerous in emerging markets living with memories of recent currency crises: in Israel foreign capital provided crucial funding for investment in the country's showcase technology sector. Israel is now solidly established as a high-tech...

It is often argued that tax competition may lead to a "race to the bottom". Such a race may hold indeed in the case of the pure case of factor mobility (such as capital mobility). However, in this paper we emphasize the unique feature of labor migration, that may nullify the "race to the bottom"...

We develop a framework in which the host country productivity has a positive effect on the intensive margin (the size of FDI flows), but only an ambiguous effect on the extensive margin (the likelihood of FDI flows to occur). The source-country productivity has a negative effect on the extensive...