Israeli Inflation From An International Perspective

Author: Mr. David William Harold Orsmond and Mr. Stanley Fischer

Israel's post-stabilization experience of moderate inflation and eventual disinflation is compared with experiences in other countries. Lessons that emerge from an examination of international experiences indicate the importance of establishing early on credibility in the nominal anchor and a commitment to persevere with disinflation policies, achieving and maintaining a tight fiscal position, measures to reduce nominal rigidities, and widespread structural reform. Israel falls short on several criteria which explains why taming inflation in the post-stabilization period has been difficult. The paper concludes with a consideration of institutional arrangements that could sustain the current low inflation levels.

Volume/Issue: Volume 2000 Issue 178

Publication date: November 2000

ISBN: 9781451858945

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Topics covered in this book

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Business and Economics , Inflation , Economics- Macroeconomics , Money and Monetary Policy , Public Finance , WP , inflation target , inflation pressure , private sector , inflation experience , inflation level , inflation inertia , anti-inflation policy , disinflation effort , stabilization inflation plateau , backward-looking inflation threshold , digit inflation , inflation experience of Israel , moderate inflation , inflation expectation , Inflation , Inflation targeting , Disinflation , Structural reforms , Global

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Summary

Israel’s post-stabilization experience of moderate inflation and eventual disinflation is compared with experiences in other countries. Lessons that emerge from an examination of international experiences indicate the importance of establishing early on credibility in the nominal anchor and a commitment to persevere with disinflation policies, achieving and maintaining a tight fiscal position, measures to reduce nominal rigidities, and widespread structural reform. Israel falls short on several criteria which explains why taming inflation in the post-stabilization period has been difficult. The paper concludes with a consideration of institutional arrangements that could sustain the current low inflation levels.