Adviser to the Government on economic matters

The Bank's Research Department assists the Governor in preparing policy recommendations and assessing policy in his/her capacity as Economic Advisor to the Government (pursuant to Section 7(b) of the Law)). The Department monitors and analyzes economic processes and distributes its findings to decision-makers -- the government, Knesset committees, the public, and international and other organizations. Finally, it creates a research infrastructure for informed policy decisions.   

The ongoing analyses and studies help to identify and understand economic processes, macroeconomic trends, support professional discussion of policy proposals, and underpin the economic analysis used in formulating policy by the Ministry of Finance, including the construction of the budget. The ongoing analysis also helps to detect impending risks to growth and stability and to adopt timely preventive policies.

The Bank's economic research takes place in four major channels:


1. Monitoring and analysis of current economic developments: The main results are published in the Bank of Israel's Annual Report, which is submitted to the government and the Knesset Finance Committee as required by the Bank of Israel Law, as well as in the semiannual Monetary Policy Report, the semiannual Financial Stability Report, and the periodic publication of Selected Research and Policy Analysis Notes.

2. The Research Department also carries out, and publishes the results of, a quarterly survey of some 750 manufacturing firms and 300 companies in a variety of other industries, and publishes a monthly state-of-the-economy index.

3. Economic policy proposals: The Department's economists participate in shaping economic policy as members of the socioeconomic agenda committees (in conjunction with the Ministry of Finance and the Prime Minister's Office). The Department also prepares economic policy proposals at its initiative in accordance with the changing needs of the economy. Salient examples of this are its participation in preparing the Economic Stabilization Program (1985), putting together the economic outlook behind the program for mass immigrant absorption in the 1990s, money- and capital-market reforms, the Long-Term Care Report (2018), the Productivity Report (2019), and the Strategy Document (2021). The Department also examines policy proposals put forward by other organizations and participates in formulating the Bank's response to them.

4. Basic and applied research: The Department's economists investigate various domestic economic issues in a broad range of domains: the pass-through mechanism of monetary policy, domestic supply and demand of goods and services, capital market, balance of payments, prices, principal industries, labor market, the government budget, government economic policy, etc. These studies are published regularly in the Discussion Papers series, the Bank of Israel's Economic Review (Hebrew), Israel Economic Review (IER), and other professional journals published in Israel and abroad. The studies identify and analyze fundamental economic processes domestic and address various policy issues.

In the Bank's capacity as the Economic Advisor to the Government, the Research Department develops analytical tools and performs quantitative policy analyses. One such tool analyzes the long-term effects of budget policy and another is a macroeconomic model that predicts tax receipts, making it possible to test the reasonability of the budget's revenue estimates.  The Department also assists international organizations such as the IMF and the OECD in obtaining an up-to-date view of the economy and in understanding domestic economic policy issues.

The Department's economists participate in various professional committees and contribute their vast knowledge on various issues.  These committees have included:

  • The Interministerial Committee on Financial Inclusion (Kamenitz Committee, 2021)
  • The Committee for Economic Advancement of the Trade and Services Industries (2021)
  • The Committee to Prepare a Program for Exposure to Imports (2021)
  • The Interministerial Committee to Set a Carbon Pricing Mechanism (2020)
  • The Committee to Advance Employment Toward 2030 (2020)
  • The Public Committee to Strengthen the Competitive Ability of Israeli Manufacturing (2018)
  • The Committee to Separate the Credit Card Companies from the Banks (2016)
  • The Committee to Increase Competition in Common Banking and Financial Services (Strum Committee, 2015)
  • The Committee on Raising the Retirement Age (Nisan Committee, 2015)
  • The Committee to Examine the Defense Budget (Brodet Committee, 2015)
  • The Team to Increase Certainty in Pension Savings (Baabad Team, 2015)
  • The Committee on Strategic Preparedness for an Aging Population (Orbach Committee, 2014)
  • The Committee to Examine the Policy Regarding Royalties from Natural Resources (Sheshinski 2, 2014)
  • The Committee on Sophistication of Trading and Encouraging Liquidity in the Stock Market (Ben-Horin Committee, 2013)
  • The Committee to Fight Poverty in Israel (Alaluf Committee, 2013)
  • The Committee to Examine the Long-Term Financial Strength of the National Insurance  Institute (2012)
  • The Committee on Increasing Competitiveness in the Economy (Shani Committee, 2012)
  • The Interministerial Committee to Examine Government Policy on Natural Gas (Tzemach Committee, 2012) and follow-on committees
  • The Committee to Lower Vacation Costs in Israel (2012)
  • The Committee for Economic and Social Change (Trajtenberg Committee, 2011)
  • The Committee to Encourage the Employment of Israelis in the Construction Industry (2010)
  • The Committee to Examine the Fiscal Policy on Oil and Gas Resources in Israel (Sheshinski Committee, 2010)
  • The Committee to Examine Employment Policy (2010)
  • The Committee to Formulate the Earned Income Tax Credit ("Negative Income Tax") (2008)
  • The Team on Agricultural Matters: Subsidies, Automation, and Encouragement of Employment (2008)
  • The Committee to Design Policy on Non-Israeli Workers (2007)
  • The Public Committee to Examine the Public Transit Reform (2007)
  • The Committee to Examine the Higher Education System ("Shohat Committee, 2007)
  • Various committees working on preparations for the Caesarea Conference
This page was last updated on: 06/05/2024