The Bank of Israel Review, vol. 55, 1983, pp. 48-60
Professor of Economics
Head, Forum Macro of Israel
Bar-Ilan University, Israel
Brezis, E. S., Leiderman, L., & Melnick, R. (1983). The Interaction between Inflation and Monetary Aggregates in Israel. The Bank of Israel Review, 55, 48–60.
Brezis, Elise S., Leo Leiderman, and Rafi Melnick. “The Interaction between Inflation and Monetary Aggregates in Israel.” The Bank of Israel Review 55 (1983): 48–60.
Brezis, Elise S., et al. “The Interaction between Inflation and Monetary Aggregates in Israel.” The Bank of Israel Review, vol. 55, 1983, pp. 48–60.
Most attempts—in this country and abroad—to explain the accelerated inflation of the last decade take account of the effect of monetary factors, and there is in fact a variety of empirical evidence which shows that their role is a dominant one. The monetary developments experienced by Israel in recent years (some of them resulting from the 1977 liberalization of foreign currency) and its high inflation (up to three digits) provide an excellent quasi-laboratory environment for research into the interactions between monetary variables and the rate of inflation—research that can contribute to our understanding and help the monetary authorities to evaluate their policies. Such a study should be based on a structural model of the monetary sector, a model that contains behavioral equations and the budget constraints of economic agents.
Keywords: Israeli economy, inflation, monetary aggregates