{
  "id": "97-908",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "97-908",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 105020,
      "date": "1997-10-08",
      "retrieved": "2016-05-24T20:57:28.895941",
      "title": "The Israeli Economy: Overview and Developments Through 1997",
      "summary": "The Israeli economy belies simple categorization. Based on a per capita income level of\n$16,783,\na large services sector, and hundreds of dynamic high-tech companies, it is modern and advanced. \nBased on the large role the government still plays in the economy, it is interventionist and regulated.\nAnd based on the country's high defense requirements, chronic trade deficits, and political economy,\nit can be described as distinctive or unique.\n  Since 1948, the economy has experienced three different stages of development. The first\n(1948-1972) and third stages (1989-1995) were classic boom periods fueled primarily by rapid\nincreases in the stock of labor. The second stage (1973-1988) was characterized by considerable\neconomic instability and turmoil. \n  The Israeli economy currently may be entering a fourth stage where concerns once again are\nbeing raised about stability and performance. The increase and size of the current account deficit\n(4.8% of GDP in 1996), combined with an overvalued exchange rate, are matters of particular\nconcern because they can be precursors to a financial crisis. This is a situation of special concern to\nIsrael because it already imports a large amount of capital to finance its deficit, and there is no\ncertainty that sources of funding at reasonable cost will continue indefinitely. \n  These economic problems have been fueled by an expansionary fiscal policy and a relatively\nrestrictive monetary policy. In order to promote economic stability, most economists agree that\nIsrael needs to pursue a less expansionary fiscal policy mainly by cutting non-productive government\nexpenditures. This, in turn, would allow central bank authorities leeway to run a less restrictive\nmonetary policy without jeopardizing other macroeconomic objectives.\n  A reduction of the high degree of government intervention in economic activity also could help\nIsrael promote economic growth and macroeconomic stability through a more efficient use of the\ncountry's resources. Given the likelihood of a slower growing labor force, productivity increases\nbrought about by structural reforms may become even more critical in the future. However, progress\nhas been gradual in reducing the government's role in owning and running enterprises, as well as\nreforming capital and labor markets. Progress has been more rapid in liberalizing foreign trade and\ncurrency barriers and in increasing competition in certain sectors.\n  Although there appears to be a consensus within Israel on the policy actions that should be\ntaken to avoid serious economic problems, implementation of a coherent economic strategy\ncontinues to be politically difficult. A perennial problem is that as Israel's political system produces\ncoalition governments, the majority party in the government is often hampered in implementing its\npreferred economic policy by competing claims from small coalition partners. A larger unknown\nis the commitment of the two major political parties, Likud and Labor, to deficit reduction and\nstructural reforms.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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          "url": "http://www.crs.gov/Reports/pdf/97-908",
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      ],
      "topics": []
    }
  ],
  "topics": [
    "Economic Policy",
    "Foreign Affairs",
    "Intelligence and National Security",
    "National Defense"
  ]
}