Israel and the World Economy: The Power of Globalization

by Assaf Razin

Overview

A rigorous analysis of the role played by globalization in key episodes in the development of the Israeli economy, from hyperinflation crisis to high-tech surge.

Anti-globalization sentiments are rising, especially in Europe and the United States, with the increasingly integrated global economy blamed for domestic economic distress. In this book, Assaf Razin argues that Israel offers a counterexample to this view, showing decisively positive economic effects of globalized finance, trade, and immigration. He offers a rigorous analysis of the role played by globalization in key episodes in the remarkable development of the Israeli economy. His findings may hold lessons for productivity-challenged advanced economies as well as for other countries such as China currently making the transition to fully developed economies.

Razin examines the wave of immigration after the collapse of the Soviet Union, as highly skilled Soviet Jews migrated to Israel and the effect on income inequality; the Great Moderation of inflation and employment in advanced economies, as Israel's inflation converged in parallel with low world inflation rates; Israel's robustness in the face of the deflation shocks of the 2008 financial crisis; and technology transmission through foreign direct investment, reinforcing Israel's high-tech sector surge. He also considers such ongoing challenges as high fertility and low labor market participation and the economic costs of the Israeli-Palestinian conflict.

Product Details

ISBN-13:	9780262344241
Publisher:	MIT Press
Publication date:	01/19/2018
Series:	The MIT Press
Sold by:	Penguin Random House Publisher Services
Format:	eBook
Pages:	232
File size:	9 MB
Age Range:	18 Years

About the Author

Assaf Razin is a former Professor at Cornell University, Emeritus Professor at the Eitan Berglas School of Economics at Tel Aviv University, and Research Fellow at the NBER, CEPR, and CESifo. He is the author of Understanding Global Crises: An Emerging Paradigm and a coauthor of, among other books, The Decline of the Welfare State: Demography and Globalization and Migration and the Welfare State: Political-Economy Policy Formation, all published by the MIT Press. He is the recipient of the 2017 EMET Prize in Economics.

Table of Contents

Preface ix

Prologue xv

I Historical Background 1

1 Swell and Retreat of High Inflation 5

2 Immigration Wave: Soviet Jew Exodus 21

3 Understanding Migration and Income Inequality 29

II Globalization, Disinflation, High Tech, and Foreign Direct Investment 51

4 The Great Moderation and Israel's Disinflation 55

5 The 2008 Global Crisis and Israel-Economy Resilience 69

6 Israel's High Technology and Globalized Finance 99

III Trending Developments 119

7 Israel and East Asia 123

8 Brain Drain from Israel and Skill-Biased Global Immigration Policy 131

9 High Fertility and Anemic Skill Acquisition 151

10 Rising Cost of Occupation 159

IV Early Literature 165

11 Israel Surveyed 169

Epilogue 173

Notes 177

References 191

Index 203

What People are Saying About This

Barry Eichengreen

Israel's economic experience contains many highly relevant lessons: how to tame inflation, how to absorb immigrants, how to make the transition to high-tech, and now how to cure the Dutch Disease. There can be no better guide than Assaf Razin to lead us through this wilderness.

Paul De Grauwe

Many countries struggle to adapt to the forces of globalization. Some turn their backs on globalization and listen to the sirens of protectionists. In this book, Assaf Razin shows how Israel did the opposite and used globalization to its advantage. It makes for fascinating reading.

Endorsement

Many countries struggle to adapt to the forces of globalization. Some turn their backs on globalization and listen to the sirens of protectionists. In this book, Assaf Razin shows how Israel did the opposite and used globalization to its advantage. It makes for fascinating reading.

—Paul De Grauwe, John Paulson Chair in European Political Economy, London School of Economics

From the Publisher

Israel's economic experience contains many highly relevant lessons: how to tame inflation, how to absorb immigrants, how to make the transition to high-tech, and now how to cure the Dutch Disease. There can be no better guide than Assaf Razin to lead us through this wilderness.

—Barry Eichengreen, George C. Pardee and Helen N. Pardee Professor of Economics and Political Science, University of California, Berkeley

Many countries struggle to adapt to the forces of globalization. Some turn their backs on globalization and listen to the sirens of protectionists. In this book, Assaf Razin shows how Israel did the opposite and used globalization to its advantage. It makes for fascinating reading.

—Paul De Grauwe, John Paulson Chair in European Political Economy, London School of Economics